The following events were completed by Chan's Imports in September 2012.

Sept. 1 Acquired $60,000 cash from the issue of common stock.

1 Purchased $36,000 of merchandise on account with terms 2/10, n/30.

5 Paid $800 cash for freight to obtain merchandise purchased on September 1.

8 Sold merchandise that cost $20,000 to customers for $38,000 on account, with terms 2/10, n/30.

8 Returned $1,500 of defective merchandise from the September 1 purchase to the supplier.

10 Paid cash for the balance due on the merchandise purchased on September 1.

20 Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period.

30 Paid $4,900 cash for selling expenses.

Required

a. Record each event in a statements model like the following one. The first event is recorded as an example.

b. Prepare an income statement for the month ending September 30.
c. Prepare a statement of cash flows for the month ending September 30.
d. Explain why there is a difference between net income and cash flow from operatingactivities.

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Assets - Liab.+ Equity Rev. - Exp. = Net Inc. Cash Flow Cash Accts. Rec. +Inv.Accts. Pay. Com. Stk. Ret. Earn. 60,000+ NA NA NA 60,000NA NA 60,000 FA