Required information Exercise 4-16A (Algo) Effect of sales returns and allowances and freight costs on the journal, ledger, and financial statements: Perpetual system LO 4-2, 4-4, 4-6, 4-7 [The following information applies to the questions displayed below.) Powell Company began the Year 2 accounting period with $19,800 cash, $61,800 Inventory, $49,900 common stock, and $31,700 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $36,800 for $75,800 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $320 cash. 3. Received returned goods from Prentise. The goods cost Powell $1,830 and were sold to Prentise for $3,840. 4. Granted Prentise a $1,100 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $53,100 cash from accounts receivable. Exercise 4-16A (Algo) Part c
Required information Exercise 4-16A (Algo) Effect of sales returns and allowances and freight costs on the journal, ledger, and financial statements: Perpetual system LO 4-2, 4-4, 4-6, 4-7 [The following information applies to the questions displayed below.) Powell Company began the Year 2 accounting period with $19,800 cash, $61,800 Inventory, $49,900 common stock, and $31,700 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $36,800 for $75,800 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $320 cash. 3. Received returned goods from Prentise. The goods cost Powell $1,830 and were sold to Prentise for $3,840. 4. Granted Prentise a $1,100 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $53,100 cash from accounts receivable. Exercise 4-16A (Algo) Part c
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:Required information
Exercise 4-16A (Algo) Effect of sales returns and allowances and freight costs on the journal, ledger, and
financial statements: Perpetual system LO 4-2, 4-4, 4-6, 4-7
[The following information applies to the questions displayed below.)
Powell Company began the Year 2 accounting period with $19,800 cash, $61,800 Inventory, $49,900
common stock, and $31,700 retained earnings. During Year 2, Powell experienced the following events:
1. Sold merchandise that cost $36,800 for $75,800 on account to Prentise Furniture Store.
2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $320 cash.
3. Received returned goods from Prentise. The goods cost Powell $1,830 and were sold to Prentise for
$3,840.
4. Granted Prentise a $1,100 allowance for damaged goods that Prentise agreed to keep.
5. Collected partial payment of $53,100 cash from accounts receivable.
Exercise 4-16A (Algo) Part c
Required
c. Prepare a multistep income statement, a balance sheet, and a statement of cash flows.
Complete this question by entering your answers in the tabs below.
Req C1 Req C2 Req C3
Prepare an statement of cash flows. (Cash outflows should be indicated with a minus sign.)
POWELL COMPANY
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash flows from operating
activities:
Cash inflow from customers
Cash outflow for expenses
Net cash flow from operating
activities
Cash flows from investing activities
Cash flows from financing
activities
Net change in cash
Plus: Beginning cash balance
Ending cash balance
* $53,100
< Req C2
$53,100
53,100
$53,100
Req C3 >
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