The Pet Store experienced the following events for the Year 1 accounting period:

Acquired $85,000 cash from the issue of common stock.

Purchased $80,500 of inventory on account.

Received goods purchased in Event 2 FOB shipping point; freight cost of $1,480 paid in cash.

Sold inventory on account that cost $46,000 for $87,000.

Freight cost on the goods sold in Event 4 was $660. The goods were shipped FOB destination. Cash was paid for the freight cost.

Customer in Event 4 returned $5,300 worth of goods that had a cost of $2,700.

Collected $71,340 cash from accounts receivable.

Paid $61,500 cash on accounts payable.

Paid $3,140 for advertising expense.

Paid $3,790 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.

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, NC for net change in cash, and NA to indicate the element is not affected by the event. Enter any decreases to account balances and cash outflows with a minus sign.)

Transaction Cost 2. 3. 4. 5. 6 8. 9. 10