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Required a. Record the events in a statements model shown below. b. Prepare an income statement, a balance sheet, and a statement of cash flows. c. Why would Prentise agree to keep the damaged goods?

Required a. Record the events in a statements model shown below. b. Prepare an income statement, a balance sheet, and a statement of cash flows. c. Why would Prentise agree to keep the damaged goods?

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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Powell Company began the Year 3 accounting period with $39,000 cash, $77,000 inventory, $58,000 common stock, and $58,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $48,500 for $102,000 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,900 and were sold to Prentise for $7,200. 4. Granted Prentise a $2,900 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $82,000 cash from accounts receivable. Required a. Record the events in a statements model shown below. b. Prepare an income statement, a balance sheet, and statement of cash flows. c. Why would Prentise agree to keep the damaged goods? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Req C Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, use the to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the account is not affected by the event, leave the cell b every cell will require entry.) POWELL COMPANY Financial Statements Model for Year 3
Transcribed Image Text:Powell Company began the Year 3 accounting period with $39,000 cash, $77,000 inventory, $58,000 common stock, and $58,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $48,500 for $102,000 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,900 and were sold to Prentise for $7,200. 4. Granted Prentise a $2,900 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $82,000 cash from accounts receivable. Required a. Record the events in a statements model shown below. b. Prepare an income statement, a balance sheet, and statement of cash flows. c. Why would Prentise agree to keep the damaged goods? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Req C Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, use the to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the account is not affected by the event, leave the cell b every cell will require entry.) POWELL COMPANY Financial Statements Model for Year 3
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