The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $65,000 cash from the issue of common stock. 2. Purchased $74,500 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,670 paid in cash 4. Sold inventory on account that cost $33,000 for $61,000. 5. Freight cost on the goods sold in Event 4 was $1,220. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,480 worth of goods that had a cost of $2,790. 7. Collected $50,020 cash from accounts receivable. 8. Paid $54,200 cash on accounts payable. 9. Paid $3,420 for advertising expense. 10. Paid $3,350 cash for insurance expense Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction NA Cost Transaction 1. 2. 3. 4. 5 b. Record each event in a horizontal statements model. The first event is recorded as an example. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input- leave cells blank if there is no corresponding input needed.) THE PET STORE Horizontal Statements Model for Year 1 Balance Sheet Income Statement Assets Liabiities Accounts Payable Stockholders' Equity Revenue Expense = Net Income Statement of Cash Flow Accounts Receivable Common Stock Events Cash Retained Inventory Earnings 1. Stock 65,000 + 65,000 65,000 FA 2. Pur inv 3. Freight 4a. Sold inv 4b. Cost 5 Pd. frt 6a. Ret. sale 6b. Ret. inv 7. Coll. AR + 8. Pd. AP 9 Pd. exp 10 Pd. exp. End Bal +