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The following listing of accounts pertains to Bengies grocery as of January 1 year 2: The following events occurred in Year 2. Assume that Benjl's
The following listing of accounts pertains to Bengies grocery as of January 1 year 2:
The following events occurred in Year 2. Assume that Benjl's uses the periodic inventory method. 1. Purchased land for $9,600 cash. 2. Purchased merchandise on account for $102,000, terms 1/10,n/45. 3. Paid freight of $1,300 cash on merchandise purchased FOB shipping point. 4. Returned $4,200 of defective merchandise purchased in Event 2. 5. Sold merchandise for $92,000 cash. 6 . Sold merchandise on account for $99,000, terms 2/10,n/30. 7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2. 8. Paid $12,200 cash for selling expenses. 9. Collected $56,000 of the accounts receivable from Event 6 within the discount period. 10. Collected $43,000 of the accounts recelvable but not within the discount period. 11. Paid $7,000 of other operating expenses. 12. A physical count indicated that $48,200 of inventory was on hand at the end of the accounting period. 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). b. Prepare a schedule of cost of goods sold and an income statement Step by Step Solution
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