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The following trial balance pertains to Benji's Grocery as of January 1, 2018: Account Title Cash Accounts receivable Merchandise inventory Accounts payable Common stock Retained earnings Beginning Balances $29,000 4,600 56,000 4,600 49,000 36,000 The following events occurred in 2018. Assume that Benji's uses the periodic inventory method. 1. Purchased land for $9,600 cash. 2. Purchased merchandise on account for $102,000, terms 1/10, n/45. 3. Paid freight of $1,300 cash on merchandise purchased FOB shipping point. 4. Returned $4,200 of defective merchandise purchased in Event 2. 5. Sold merchandise for $92,000 cash. 6. Sold merchandise on account for $99,000, terms 2/10, n/30. 7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2. 8. Paid $12,200 cash for selling expenses. 9. Collected $56,000 of the accounts receivable from Event 6 within the discount period. 10. Collected $43,000 of the accounts receivable but not within the discount period. 11. Paid $7,000 of other operating expenses. 12. A physical count indicated that $48,200 of inventory was on hand at the end of the accounting period. Required: a. Record the preceding transactions in a horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change. If the account is not affected by the event, leave the cell blank. The beginning balances have been recorded as an example. b. Prepare a schedule of cost of aoods sold and an income statement BENJI'S GROCERY Horizontal Statements Model Balance Sheet Income Statement Event Statement of Cash Flows Revenue Expenses = Net Income Cash Assets Accounts + Merchandise + Receivable Inventory 4,600 + 56,000 + + + Stockholders' Equity Common + Retained Stock Earnings 49,000 + 36,000 Bal. = Liabilities + Land Accounts Payable 4,600 + 9,600/= 102,000 29,000 + (9,600) + + 1. + + 2. 2 + + -1 3. (1,300) + + 102,000 + 1,300 + (4,200) + + = 4. + + + (4,200) + = 5. 92,000+ + + + = 92,000 99,000 6. + 99,000+ + + 7a. + + + + = + 1 + 7b. + + = + 8. (12,200) + + + + 1 (12,200) 12,200/= (12,200) (12,200) 9a. + + + 9b. + + + = 10. + + + = 11. + + + + 12. + + Total $ 97,900 + $ 103,600 + $ 155,100 + $ 9,600 = $ 102,400 + $ 49,000 + $ 214,800 $ 0- $ 12,200 $ $ (12,200)| (12,200) Req A Req B CGS Sched Req B Inc Stmt Prepare a schedule of cost of goods sold. BENJI'S GROCERY Schedule of Cost of Goods Sold For the Year Ended December 31, 2018 Cost of goods available for sale Cost of goods sold Req A Req B CGS Sched Req B Inc Stmt Prepare an income statement. BENJI'S GROCERY Income Statement For the Year Ended December 31, 2018 Revenue Net sales $ $ 0 0 Operating expenses Total operating expenses 0
