Saved Exercise 4-3A (Algo) Effect of inventory transactions on the income statement and statement of cash flows: Perpetual system LO 4-1 During Year 1, Hardy Merchandising Company purchased $25,000 of inventory on account. Hardy sold inventory on account that cost $18,800 for $28,100. Cash payments on accounts payable were $15,600. There was $25,000 cash collected from accounts receivable. Hardy also paid $4,500 cash for operating expenses. Assume that Hardy started the accounting period with $20,500 in both cash and common stock. Required a. Record the events in a horizontal statement model. If the element is not affected by the event, leave the cell blank. b. What is the balance of accounts receivable at the end of Year 1? c. What is the balance of accounts payable at the end of Year 1? d. What are the amounts of gross margin and net income for Year 1? Complete this question by entering your answers in the tabs below. Req A Req B to D Record the events in a horizontal statement model. If the element is not affected by the event, leave the cell blank. (Not every cell will require entry. Ent balances with a minus sign.) HARDY MERCHANDISING COMPANY ssignment #1 i es Saved Record the events in a horizontal statement model. If the element is not affected by the event, leave the cell blank. (Not every cell will require entry. balances with a minus sign.) HARDY MERCHANDISING COMPANY Effect of Events on the Financial Statements Balance Sheet = Liabilities + Stockholders' Equity Income Statement Event Cash + Assets Accounts Receivable + Inventory = Accounts Payable + Common Stock + Retained Earnings Revenue - Expenses = Net Income Beg. bal. 20,500+ + + 20,500+ 1+ + + 223 + + ++ + ++ 4. 5. +] + + End. bal. $ $ 20,500+ 0+ $ 0 = $ 0+ +-+-+-+-+-+-+ + ++ + + $ 20,500 + $ 0 $ 0 $ 0 = $ 0 Feri A Req B to D > a. Record the events in a horizontal statement model. If the element is not affected by the event, leave the cell blank. b. What is the balance of accounts receivable at the end of Year 1? c. What is the balance of accounts payable at the end of Year 1? d. What are the amounts of gross margin and net income for Year 1? ok Complete this question by entering your answers in the tabs below. t Req A Req B to D t nces What is the balance of accounts receivable, accounts payable, amounts of gross margin and net income at the end of Year 1? a. Accounts receivable b. Accounts payable c. Gross margin d. Net income < Req A Red Bls C