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Marcus Xavier noticed that many small rural towns did not have retail sporting goods outlets. To address this need, Marcus created Xavier Sporting Goods. The business experienced the following events during its first year of operation. 1. Acquired $90,000 cash from the issue of common stock. 2. On February 1, Year 1, Xavier Sporting Goods purchased merchandise inventory for $65,000 on account from True Sports Incorporated with terms 5/10 n/30. 3. On February 8, Year 1, Xavier Sporting Goods paid True Sports Incorporated in cash to settle the payable. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as an example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event Number Assets Cash + Inventory 1. 90,000 + 2. За. 3b. Total 90,000+ *NC Net change in cash Balance Sheet = Liabilities + Stockholders' Equity Income Statement Stock Accounts Common Retained Revenue Payable + Earnings + 90,000 + Expenses = Net Income Statement of Cash Flows 90,000 FA + 0 = 0+ 90,000 + 0 0 = 0 90,000 NC*

Marcus Xavier noticed that many small rural towns did not have retail sporting goods outlets. To address this need, Marcus created Xavier Sporting Goods. The business experienced the following events during its first year of operation. 1. Acquired $90,000 cash from the issue of common stock. 2. On February 1, Year 1, Xavier Sporting Goods purchased merchandise inventory for $65,000 on account from True Sports Incorporated with terms 5/10 n/30. 3. On February 8, Year 1, Xavier Sporting Goods paid True Sports Incorporated in cash to settle the payable. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as an example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event Number Assets Cash + Inventory 1. 90,000 + 2. За. 3b. Total 90,000+ *NC Net change in cash Balance Sheet = Liabilities + Stockholders' Equity Income Statement Stock Accounts Common Retained Revenue Payable + Earnings + 90,000 + Expenses = Net Income Statement of Cash Flows 90,000 FA + 0 = 0+ 90,000 + 0 0 = 0 90,000 NC*

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter14: Adjustments For A Merchandising Business
Section: Chapter Questions
Problem 1CP: Block Foods, a retail grocery store, has agreed to purchase all of its merchandise from Square...
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Marcus Xavier noticed that many small rural towns did not have retail sporting goods outlets. To address this need, Marcus created Xavier Sporting Goods. The business experienced the following events during its first year of operation. 1. Acquired $90,000 cash from the issue of common stock. 2. On February 1, Year 1, Xavier Sporting Goods purchased merchandise inventory for $65,000 on account from True Sports Incorporated with terms 5/10 n/30. 3. On February 8, Year 1, Xavier Sporting Goods paid True Sports Incorporated in cash to settle the payable. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as an example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event Number Assets Cash + Inventory 1. 90,000 + 2. За. 3b. Total 90,000+ *NC Net change in cash Balance Sheet = Liabilities + Stockholders' Equity Income Statement Stock Accounts Common Retained Revenue Payable + Earnings + 90,000 + Expenses = Net Income Statement of Cash Flows 90,000 FA + 0 = 0+ 90,000 + 0 0 = 0 90,000 NC*
Transcribed Image Text:Marcus Xavier noticed that many small rural towns did not have retail sporting goods outlets. To address this need, Marcus created Xavier Sporting Goods. The business experienced the following events during its first year of operation. 1. Acquired $90,000 cash from the issue of common stock. 2. On February 1, Year 1, Xavier Sporting Goods purchased merchandise inventory for $65,000 on account from True Sports Incorporated with terms 5/10 n/30. 3. On February 8, Year 1, Xavier Sporting Goods paid True Sports Incorporated in cash to settle the payable. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as an example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event Number Assets Cash + Inventory 1. 90,000 + 2. За. 3b. Total 90,000+ *NC Net change in cash Balance Sheet = Liabilities + Stockholders' Equity Income Statement Stock Accounts Common Retained Revenue Payable + Earnings + 90,000 + Expenses = Net Income Statement of Cash Flows 90,000 FA + 0 = 0+ 90,000 + 0 0 = 0 90,000 NC*
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