The following events occurred in Year 2. Assume that Benjis uses the periodic inventory method.

Purchased land for $9,900 cash.

Purchased merchandise on account for $105,000, terms 1/10, n/45.

Paid freight of $1,450 cash on merchandise purchased FOB shipping point.

Returned $4,500 of defective merchandise purchased in Event 2.

Sold merchandise for $95,000 cash.

Sold merchandise on account for $103,500, terms 2/10, n/30.

Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.

Paid $12,500 cash for selling expenses.

Collected $59,000 of the accounts receivable from Event 6 within the discount period.

Collected $44,500 of the accounts receivable but not within the discount period.

Paid $7,300 of other operating expenses.

A physical count indicated that $48,500 of inventory was on hand at the end of the accounting period.

Required

Record the preceding transactions in a horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change. If the account is not affected by the event, leave the cell blank. The beginning balances have been recorded as an example.

Prepare a schedule of cost of goods sold and an income statement.