Problem 3-22A (Algo) Effect of purchase returns and allowances and purchase discount on the financial statements: Perpetual system LO 3-1, 3-2, 3-3 The following events were completed by Dana's Imports in September, Year 1 : September 1 Acquired $41,000 cash from the issue of common stock. September 1 Purchased $28,500 of merchandise on account with terms 2/10,n/30. September 5 Paid $500 cash for freight to obtain merchandise purchased on September 1 . September 8 Sold merchandise that cost $9,250 to customers for $15,000 on account, with terms 2/10, n/30 September 8 Returned $950 of defective merchandise from the September 1 purchase to the supplier. September 10 Paid cash for the balance due on the merchandise purchased on September 1 . September 20 Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period. September 30 Paid $2,800 cash for selling expenses. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first event is recorded as an example. b. Prepare an income statement for the month ending September 30 . c. Prepare a statement of cash flows for the month ending September 30 . DANA'S IMPORTS Effect of Transactions on Financial Statements Using Horizontal Statements Model Balance Sheet Income Statement Note: Cash outflows should be indicated with a minus sign. Complete this question by entering your answers in the tabs below. Prepare an income statement for the month ending September 30