Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. Acquired $35,000 cash from the issue of common stock. Purchased inventory for $28,000 cash. Sold inventory costing $17,500 for $30,500 cash. Required: Record the events in a horizontal financial statements model. Prepare an income statement for Year 1 (use the multistep format). What is the amount of total assets at the end of the period?
Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. Acquired $35,000 cash from the issue of common stock. Purchased inventory for $28,000 cash. Sold inventory costing $17,500 for $30,500 cash. Required: Record the events in a horizontal financial statements model. Prepare an income statement for Year 1 (use the multistep format). What is the amount of total assets at the end of the period?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system.
- Acquired $35,000 cash from the issue of common stock.
- Purchased inventory for $28,000 cash.
- Sold inventory costing $17,500 for $30,500 cash.
Required:
- Record the events in a horizontal financial statements model.
- Prepare an income statement for Year 1 (use the multistep format).
- What is the amount of total assets at the end of the period?
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