Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $17,000 cash from the issue of common stock. 2. Purchased inventory for $5,300 cash 3. Sold inventory costing $3,180 for $5,406 cash. 4. Paid $900 for advertising expense. 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 (A), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event Cash Assets Inventand MILO CLOTHING Effect of Events on the Financial Statements Stockholders Equity Common Retained Revenue Expenses Net Statement of Cash
Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $17,000 cash from the issue of common stock. 2. Purchased inventory for $5,300 cash 3. Sold inventory costing $3,180 for $5,406 cash. 4. Paid $900 for advertising expense. 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 (A), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event Cash Assets Inventand MILO CLOTHING Effect of Events on the Financial Statements Stockholders Equity Common Retained Revenue Expenses Net Statement of Cash
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Milo Clothing experienced the following events during Year 1, its first year of operation:
1. Acquired $17,000 cash from the issue of common stock.
2. Purchased inventory for $5,300 cash.
3. Sold inventory costing $3,180 for $5,406 cash.
4. Paid $900 for advertising expense.
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).
Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.
Total
Event
1.
2.
Ja
36
4
Cash
Assets
0+
NC-Net change in cash
Inventory
MILO CLOTHING
Effect of Events on the Financial Statements
Stockholders' Equity
Common
Stock
0
.
Retained Revenue
Earnings
Expenses w
0
W
Net
Income
0
Statement of Cash
Flows
ONC
Checke
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