Bishop Supply Company had the following transactions in 2006:

1. Acquired \($60,000\) cash from the issue of common stock.

2. Purchased \($180,000\) of merchandise for cash in 2006.

3. Sold merchandise that cost \($110,000\) for \($200,000\) during the year under the following terms:

4. Collected all the amount receivable from the credit card company.
5. Collected \($9,200\) of accounts receivable.
6. Paid selling and administrative expenses of \($46,000\) .
7. Determined that 5 percent of the ending accounts receivable balance would be uncollectible.

Required:

a. Record the above events in a horizontal statements model like the following one. When you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). The letters NA indicate that an element is not affected by the event.

b. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2006.

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$ 50,000 140,000 10,000 Cash Sales Credit Card Sales (The credit card company charges a 3 percent service fee.) Sales on Account