The following listing of accounts pertains to Benji's Grocery as of January 1, Year 2: Account Title Beginning Balances Cash $24,500 Accounts receivable 3,700 Merchandise inventory 47,000 Accounts payable 3,700 Common stock 40,000 Retained earnings 31,500 The following events occurred in Year 2. Assume that Benji's uses the periodic inventory method. 1. Purchased land for $8,700 cash. 2. Purchased merchandise on account for $93,000, terms 2/10, n/45. 3. Paid freight of $850 cash on merchandise purchased FOB shipping point. 4. Returned $3,300 of defective merchandise purchased in Event 2. 5. Sold merchandise for $83,000 cash. 6. Sold merchandise on account for $85,500, terms 3/10, n/30. 7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2. 8. Paid $11,300 cash for selling expenses. 9. Collected $47,000 of the accounts receivable from Event 6 within the discount period. 10. Collected $38,500 of the accounts receivable but not within the discount period. 11. Paid $6,100 of other operating expenses. 12. A physical count indicated that $47,300 of inventory was on hand at the end of the accounting period. Required a. 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. b. Prepare a schedule of cost of goods sold and an income statement. 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 affect the event, leave the cell blank. The beginning balances have been recorded as an example. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) Show le BENJI'S GROCERY Horizontal Statements Model Event Cash Bal. 24,500 + 1. (8,700) + Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Statement of Cash Flows Accounts Receivable Merchandise Inventory Accounts Common Retained Revenue Expenses Net Income + Land Payable Stock Earnings 3,700 + 47,000 + 3,700 + 40,000+ 31,500 + + 2. 3. (850) + 4. + 5. 83,000 + + 6. 7a. 7b. 8. 9a. 9b. 10. 11. + 12. Total $ 97,950 + $ 3,700+ $ 47,000 + $ 0 = $ 3,700 + $ 40,000+ $ 31,500 $ 0 $ 0 = $ 0 $ Prepare a schedule of cost of goods sold. BENJI'S GROCERY Schedule of Cost of Goods Sold For the Year Ended December 31, Year 2 Cost of goods available for sale Cost of goods sold Prepare an income statement. BENJI'S GROCERY Income Statement For the Year Ended December 31, Year 2 Revenue Net sales Operating expenses 69 $ 0 0 Total operating expenses 0