Please with explanation or examples.Maybe about dividends. But I do not quite understand. Question 3. Thanks **Accounting Events and Financial Statement Preparation**On January 1, 2021, CMoore started a business. The company experienced the following accounting events during its first year of operations:1. **Capital Investment** - Started the business by issuing common stock for $175,000 in cash.2. **Inventory Purchase** - Paid $138,250 in cash to purchase inventory.3. **Merchandise Sales** - Sold merchandise that cost $70,000 for $157,500, with the sale made on account.4. **Operating Expenses** - Paid $35,000 for operating expenses.5. **Inventory Write-off** - Wrote off $10,500 of inventory.6. **Accounts Receivable Collection** - Collected $140,000 in cash from accounts receivable.**Required Tasks**1. **Transaction Recording** - Record the preceding transactions using the horizontal statements model. 2. **Financial Statements Preparation** - Prepare an income statement, a balance sheet, and a statement of cash flows.3. **Investment Recovery Analysis** - Given CMoore sold inventory for $157,500, analyze if he can recover more than 20% of the $175,000 he invested in the stock. Provide reasoning to support your conclusion.> **Hint:** Focus on the net income generated by business activities during the period in relation to the original investment.

Financial statements are prepared at the end of an accounting period in order to assess the…

On January 1, 2021, CMoore started a business The company had the following accounting events during the first year of operation. Started the business by issuing common stock for Paid $138,250 cash to purchase inventory. 1. $175,000 cash. 2. 3 Sold merchandise that cost $70,000 for $157,500 on account. $35,000 for operating expenses. $10,500 of inventory Collected $140,000 cash from accounts receivable. 4 Paid Wrote off 6 REQUIRED 1. Record the preceding transactions in the horizontal statements model. 2. Prepare an income statement, a balance sheet, and a statement of cash flows. Since CMoore sold inventory for $ 3. $ 157,500 he will be able to recover more than 20% of the 175,000 he invested in the stock. Do you agree with this statement? Why or why not? Hint : Think Net Income generated by business activity in the period compared to the original investment

On January 1, 2021, CMoore started a business The company had the following accounting events during the first year of operation. Started the business by issuing common stock for Paid $138,250 cash to purchase inventory. 1. $175,000 cash. 2. 3 Sold merchandise that cost $70,000 for $157,500 on account. $35,000 for operating expenses. $10,500 of inventory Collected $140,000 cash from accounts receivable. 4 Paid Wrote off 6 REQUIRED 1. Record the preceding transactions in the horizontal statements model. 2. Prepare an income statement, a balance sheet, and a statement of cash flows. Since CMoore sold inventory for $ 3. $ 157,500 he will be able to recover more than 20% of the 175,000 he invested in the stock. Do you agree with this statement? Why or why not? Hint : Think Net Income generated by business activity in the period compared to the original investment

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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