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This is one question, answer the last two tables. At the beginning of 2013, the Bradley Company had the following balances in its accounts: Cash
This is one question, answer the last two tables.
At the beginning of 2013, the Bradley Company had the following balances in its accounts: Cash Inventory Common stock Retained earnings $ 8,600 18,000 20,000 6,600 During 2014, the company experienced the following events: 1. Purchased inventory that cost $4,400 on account from Bivins Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $190 were paid in cash. 2. Returned $400 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Bivins Company within the cash discount period. 4. Sold inventory that had cost $6,000 for $11,000 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $800 and was sold to the customer for $1,450 cash. The customer was paid $1,450 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $120 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $15,500 of inventory was on hand at the end of the accounting period. Required a. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). (Select "NA" if there is no effect on the "Classification".) Classification Event 1a (purchase inventory). 1b (shipping cost). AS AE INA NA 4a (recording revenue). 4b (recording cost of goods sold). AU 5a (reversing revenue). AU 5b (reversing cost of goods sold). Required information b. Record each event in a statements model like the following one. 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. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) Event Bal. + + + 01 + + BRADLEY COMPANY Horizontal Statements Model - 2014 Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Statement of Cash Net Flows Revenue - Expenses = Cash Accounts . Merchandise _ Accounts. Common + Retained Income Receivable Inventory Payable" Stock Earnings 8,600 + 18,000 = 20,000 + 6,600 NA 0+ 4,400 = 4,400 0 0- ONA (190) + 190 = 01 01 - 01 (190) OA 0+ 0+ (400) = (400) + 0 + 0 0- 01 ONA (3,960) + (40) = I. (4,000) 01- op (3,960) OA 0 + 11,000+ 0 + 11,000 11,000 - 0 = 11,000 OINA 0 + 0 + (6,000) = 0+ (6,000) 01 - 6,000 = { (6,000) ONA (1,450) + 0 0 = 0 + 0+ (1,450) (1,450) - 0 = (1,450)| (1,450) OA 0 + 0 + 800] = 0 + 0 + 800 01- (800) = 800 OINA (120) + 0 + 0= 0 + (120) 01 - 120 = (120) (120) OA 10,780 + (11,000) + 0 = 0 + 0+ (220) (220) - 0 = (220) 10,780 OA 0+ 0+ (1,450) = 0 + 0 + (1,450) 01 - 1,450 = (1,450) OINA $ 13,660 + $ 0 + $ 15,500 = $ 0 + $ 20,000 + $ 9,160 $ 9,330 - $ 6,770 = $ 2,560 $ 5,060 + Ooo + + 01 + + + 7. Bal. Prepare a multistep income statement. BRADLEY COMPANY Income Statement For the Year Ended December 31, 2014 Net sales $ 9,330 Cost of goods sold (6,650) Gross margin 2,680 Operating expenses | Transportation-out (120) Net income $ 2,560 C- Prepare a statement of changes in stockholders' equity. BRADLEY COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, 2014 Beginning common stock $ 20,000 Plus: Stock issued 0 Ending common stock $ 20,000 Beginning retained earnings $ 6,600 Plus: Net income - 2,560 Ending retained earnings 9,160 Total stockholders' equity $ 29,160 C- Prepare a balance sheet. 3. BRADLEY COMPANY Balance Sheet As of December 31, 2014 Assets $ 0 Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity $ $ 0 0 C- Prepare a statement of cash flows. (Enter cash outflows as negative amounts.) BRADLEY COMPANY Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balanceStep by Step Solution
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