The following trial balance pertains to Cals Grocery as of January 1, 2014:

Account Title	Beginning Balances
Cash	$	30,500
Accounts receivable		4,900
Merchandise inventory		59,000
Accounts payable		4,900
Common stock		52,000
Retained earnings		37,500

The following events occurred in 2014. Assume that Cals uses the periodic inventory method.

1.	Purchased land for $9,900 cash.
2.	Purchased merchandise on account for $105,000, terms 1/10, n/45.
3.	Paid freight of $1,450 cash on merchandise purchased FOB shipping point.
4.	Returned $4,500 of defective merchandise purchased in Event 2.
5.	Sold merchandise for $95,000 cash.
6.	Sold merchandise on account for $103,500, terms 2/10, n/30.
7.	Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
8.	Paid $12,500 cash for selling expenses.
9.	Collected $59,000 of the accounts receivable from Event 6 within the discount period.
10.	Collected $44,500 of the accounts receivable but not within the discount period.
11.	Paid $7,300 of other operating expenses.
12.	A physical count indicated that $48,500 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, NC for net change in cash and NA to indicate accounts not affected by the event. The beginning balances have been recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.)

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

Can it be please explained step by step? Thanks