The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $85,000 cash from the issue of common stock. 2. Purchased $80,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $950 paid in cash. 4. Sold inventory on account that cost $36,000 for $67,000. 5. Freight cost on the goods sold in Event 4 was $1,180. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,540 worth of goods that had a cost of $2,820. 7. Collected $54,940 cash from accounts receivable. 8. Paid $57,200 cash on accounts payable. 9. Paid $3,220 cash for advertising expense. 10. Paid $3,750 cash for insurance expense. Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? b. Record the above events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example. Complete this question by entering your answers in the tabs below. Required A Required B Record the above events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require entry.) Event 1. Cash 85,000+ THE PET STORE Horizontal Statements Model for Year 1 Balance Sheet Assets Accounts Receivable Inventory = = Liabilities Accounts Payable Stockholders' Equity Common Retained Revenue Stock 85,000+ Earnings Income Statement Expenses = Net Income Statement of Cash Flows 85,000 FA 2. + 3. (950) 80,000 = 950= 80,000+ + (950) OA 4a. 67,000+ + + 67,000 4b. + (36,000) + + 5. (1,180)+ + + 36,000- 1,180 63. (5,540)+ (5,540) 67,000 (36,000) (1,180) (5,540) (1,180) OA 6b. + 2,820 (2,820)- 2,820 7. 54,940 + (54,940) + 54,940 OA 8. (57,200) + = (57,200) + (57,200) OA 9. (3,220)+ 10. (3,750) + 3,220 3,750 Bal 73,640 + 6,520 + 47,770- 22,800+ 85,000 61,460 41,330 (3,220) (3,750) 20,130 (3,220) OA (3,750) OA 73,640 NC Show less