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b. Record each event in a horizontal statements model. The first event is recorded as an example. (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. Enter any decreases to account balances and cash outflows with a minus sign.)

b. Record each event in a horizontal statements model. The first event is recorded as an example. (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. Enter any decreases to account balances and cash outflows with a minus sign.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Just answer b.
b. Record each event in a horizontal statements model. The first event is recorded as an example. (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. Enter any decreases to account balances and cash outflows with a minus sign.) ts THE PET STORE Horizontal Statements Model for Year 1 eBook Balance Sheet Income Statement Assets Stockholders' Equity - Expense = Net Income Statement of Cash Flow Liabilities Revenue Accounts Receivable Accounts Common Stock Retained Events Cash Inventory %3D + Hint Payable Earnings 1. Stock 55.000 + 55.000 + 55,000 FA + 2. Pur inv. + %3D + %3D Print 3. Freight + %3D + + %3D 4a. Sold inv. + + %3D 4b. Cost + + %3D + erences 5. Pd. frt. + 6a. Ret. sale + 6b. Ret. inv + + + %3D 7. Coll. AR + + 8. Pd. AP + 9. Pd. exp. + + %3D 10 Pd. exp. + End Bal. 55,000+ 0 + 0 =| 55,000 + 0 + 0 = 55,000
Transcribed Image Text:b. Record each event in a horizontal statements model. The first event is recorded as an example. (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. Enter any decreases to account balances and cash outflows with a minus sign.) ts THE PET STORE Horizontal Statements Model for Year 1 eBook Balance Sheet Income Statement Assets Stockholders' Equity - Expense = Net Income Statement of Cash Flow Liabilities Revenue Accounts Receivable Accounts Common Stock Retained Events Cash Inventory %3D + Hint Payable Earnings 1. Stock 55.000 + 55.000 + 55,000 FA + 2. Pur inv. + %3D + %3D Print 3. Freight + %3D + + %3D 4a. Sold inv. + + %3D 4b. Cost + + %3D + erences 5. Pd. frt. + 6a. Ret. sale + 6b. Ret. inv + + + %3D 7. Coll. AR + + 8. Pd. AP + 9. Pd. exp. + + %3D 10 Pd. exp. + End Bal. 55,000+ 0 + 0 =| 55,000 + 0 + 0 = 55,000
The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $55,000 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 $1,400 paid in cash. 4. Sold inventory on account that cost $44,000 for $83,000. 5. Freight cost on the goods sold in Event 4 was $1,200. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,360 worth of goods that had a cost of $2,730. 7. Collected $68,060 cash from accounts receivable. 8. Paid $64,000 cash on accounts payable. 9. Paid $3,360 for advertising expense. 10. Paid $3,570 cash for insurance expense. Required a. Which of these events affect period (selling and adm NA. istrative) costs? Which result in product costs? If neither, label the transaction Transaction Cost 1. NA
Transcribed Image Text:The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $55,000 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 $1,400 paid in cash. 4. Sold inventory on account that cost $44,000 for $83,000. 5. Freight cost on the goods sold in Event 4 was $1,200. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,360 worth of goods that had a cost of $2,730. 7. Collected $68,060 cash from accounts receivable. 8. Paid $64,000 cash on accounts payable. 9. Paid $3,360 for advertising expense. 10. Paid $3,570 cash for insurance expense. Required a. Which of these events affect period (selling and adm NA. istrative) costs? Which result in product costs? If neither, label the transaction Transaction Cost 1. NA
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