The Sports Store experienced the following events for the 2014 accounting period: 1. Acquired $40,000 cash from the issue of common stock. 2. Purchased $78,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $900 paid in cash. 4. Sold inventory on account that cost $46,000 for $72,000. 5. Freight cost on the goods sold in Event 4 was $560. The goods were shipped FOB destination. Cash .. was paid for the freight cost. 6. Customer in Event 4 returned $5,100 worth of goods that had a cost of $2,950. 7. Collected $61,500 cash from accounts receivable. 8. Paid $66,100 cash on accounts payable. 9. Paid $2,600 for advertising expense. 10. Paid $3,100 cash for insurance expense. a. Which of these events affect period (selling and administrative) costs ? Which result in product costs? If neither, select the transaction NA. ansaction Cost 1. NA 2. Product costs 3. Product costs 4. Product costs 5. Period costs 6. Product costs 7. NA 8. NA Period costs 9. 10. Period costs event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) Event Statement of Cash Flows + + 1. 2 4b. The Sports Store Horizontal Statements Model for 2014 Balance Sheet Income Statement Assets Liabilities + Stockholders' Equity Net Accounts Accounts + Inventory = Common Retained Revenue - Cash Expenses Receivable Income Payable Stock Earnings 40,000 + 40,000+ o + 01 + 78,000 78,000 ol + 0 0 01 = 0 (900) ol 900 0+ ol+ 0 0 - 0 = 0 0+ + ol 01 + 72,000 72,000 - 0 = ol+ 0. 01+ 0- = (560) + 01 + 0- 0 + 0+ (560) 0- 560 0 + (5,100)+ 0 = 0. 01 + (5.100) (5,100) ol 0+ 01 + 2,950 - 0 0+ 2,950 01 (2,950) - 61,500 + (61,500) + 01 = 01 01 + 0 01- 01 0 (66,100) 01 + 0 (66.100) ol + 0 01- 01 0 (2,600) 0 0 = 0 01 + (2.600) 0 2.600 (2.600) (3,100) + 01 - 0 - 0 + 01 + (3.100) 0 3,100 = (3,100) 28,240 + (66,600) - 81,850 = 11,900 + 40,000 + 63,590 66,900 3,310 = 17,590 + 5. . 6b. 7. 8. 9. 40,000 FA OINA (900) OA O NA (560) OA ONA OINA 61,500 OA (66,100) OA (2,600) OA (3,100) OA 28,240 INC 10. Bal. 1