Homework Answers
a.
| Event | Cash | Inventory | Common Stock | Retained Earnings | Revenue | Expenses | Net Income | Cash Flow | |
| 1 | $ 30,000 | $ 30,000 | $ 30,000 | FA | |||||
| 2 | $ (18,000) | $ 18,000 | $ (18,000) | OA | |||||
| 3a | $ 32,000 | $ 32,000 | $ 32,000 | $ 32,000 | $ 32,000 | OA | |||
| 3b | $ (15,000) | $ (15,000) | $ 15,000 | $ (15,000) | |||||
| Total | $ 44,000 | $ 3,000 | $ 30,000 | $ 17,000 | $ 32,000 | $ 15,000 | $ 17,000 | $ 44,000 |
b.
| Income Statement | |
| Sales Revenue | $ 32,000 |
| Cost of Goods Sold | $ 15,000 |
| Gross profit | $ 17,000 |
c.
Total Assets = $47,000
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Dan Watson started a small merchandising business In Year 1. The business experienced the following events...
Dan Watson started a small merchandising business in Year 1. The business experienced the following events...
Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual Inventory system, 1. Acquired $28,500 cash from the issue of common stock. 2. Purchased inventory for $22,800 cash. 3. Sold inventory costing $17.000 for $31,000 cash. Required a. Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA...
Dan Watson started a small merchandising business in 2018. The business experienced the following events during...
Dan Watson started a small merchandising business in 2018. The
business experienced the following events during its first year of
operation. Assume that Watson uses the perpetual inventory
system.
Acquired $30,000 cash from the issue of common stock.
Purchased inventory for $18,000 cash.
Sold inventory costing $15,000 for $32,000 cash.
Required
Record the events in a horizontal statement model. In the Cash Flow
column, use OA to designate operating activity, IA for investment
activity, FA for financing activity, or NC...
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Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual Inventory system, 1. Acquired $28,500 cash from the issue of common stock. 2. Purchased inventory for $22,800 cash. 3. Sold inventory costing $17.000 for $31,000 cash. Required a. Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA...
Dan Watson started a small merchandising business in 2018. The
business experienced the following events during its first year of
operation. Assume that Watson uses the perpetual inventory
system.
Acquired $30,000 cash from the issue of common stock.
Purchased inventory for $18,000 cash.
Sold inventory costing $15,000 for $32,000 cash.
Required
Record the events in a horizontal statement model. In the Cash Flow
column, use OA to designate operating activity, IA for investment
activity, FA for financing activity, or NC...
Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. 1. Acquired $33,000 cash from the issue of common stock. 2. Purchased inventory for $26,400 cash. 3. Sold inventory costing $16,400 for $29,000 cash. Required a. Record the events in general journal format. b. Post the entries to T-accounts. c. Determine the amount of gross margin. d. What is the...
I cannot figure out what is incorrect in what I did. I don't
understand what the red x's are for!
Exercise 3-3 Effect of inventory transactions on financial statements: Perpetual system LO 3-1 Dan Watson started a small merchandising business in 2018. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. . Acquired $30,000 cash from the issue of common stock. 2. Purchased inventory for $18,000 cash. 3. Sold...
Expert Computers was started in Year 1. The company experienced the following accounting events during its first year of operation: 1. Started business when it acquired $40,000 cash from the issue of common stock. 2. Purchased merchandise with a list price of $32,000 on account, terms 2/10, n/30. 3. Pald off one-half of the accounts payable balance within the discount period. 4. Sold merchandise on account for $28,000. Credit terms were 120, 1/30. The merchandise had cost Expert Computers $16,000....
Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $17,500 cash from the issue of common stock. 2. Purchased inventory for $5,200 cash. 3. Sold inventory costing $3,120 for $5,304 cash. 4. Paid $800 for advertising expense. Required Record the events in a horizontal financial statements model. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash....
Ben Bradley started Bradley Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $2,400 of cash revenue for performing services, 2. Borrowed $3,900 cash from the bank. 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on August 1, Year 1, had a one-year term and a 8 percent annual interest rate. Required a. What is the amount of interest expense...
During Year 1, Hardy Merchandising Company purchased $20,000 of inventory on account. Hardy sold inventory on account that cost $15,000 for $22,500. Cash payments on accounts payable were $12,500. There was $20,000 cash collected from accounts receivable. Hardy also paid $4,000 cash for operating expenses. Assume that Hardy started the accounting period with $18,000 in both cash and common stock. Required a. Identify the events described in the preceding paragraph and show them in a horizontal statements model. The first...
Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $16,200 of cash revenue. 2. Borrowed $12,000 cash from the bank 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1, had a one-year term and art 8 percent annual interest rate. Required a. What is the amount of interest payable at December 31,...
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