I need help. please please solve exactly in table form just like the question fo
ID: 2332109 • Letter: I
Question
I need help. please please solve exactly in table form just like the question for easy understanding. thanks.
(2ii)
The Pet Store experienced the following events for the 2018 accounting period 1. Acquired $65,000 cash from the issue of common stock. 2. Purchased $82,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point, freight cost of $930 paid in cash. 4. Sold inventory on account that cost $48,000 for $91,000. 5. Freight cost on the goods sold in Event 4 was $1,060. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $6,140 worth of goods that had a cost of $3,120. 7. Collected $74,620 cash from accounts receivable 8. Paid $69,200 cash on accounts payable. 9. Paid $3,430 for advertising expense. 10. Paid $3,560 cash for insurance expense. Requirec a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction b. Record the above events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for NA. investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The beginning balances have been recorded as an example. Complete this question by entering your answers in the tabs below.Explanation / Answer
Answer: Requirement a Purchase of inventory, freight paid would be a product cost and advertising expense, insurance expense would affect period (selling and administrative) cost. Requirement b The PET STORE Horizontal Statement Model for 2018 Event Balance Sheet Asset = Liabilities + Stockholders' Equity Income Statement Statement of Cash flows Cash + Accounts Receivable + Inventory = Accounts payable + Common Stock + Retained Earning Revenue - Expenses = Net Income 1 65000 + + = + 65000 + - = 0 65000 FA Capital invested in cash would increase cash and equity by $65,000 and would be cash inflow from financing activity 2 + + 82000 = 82000 + + - = 0 Inventory purchased on account would increase inventory and accounts payable by $82,000. 3 -930 + + = + + -930 - 930 = -930 -930 OA Freight paid would decrease cash and retained earning by $930 and would be cash outflow from operating activity 4 + 91000 + -48000 = + + 43000 91000 - 48000 = 43000 Goods sold on account would increase retained earing and accounts receivable by $91,000. 5 -1060 + + = + + -1060 - 1060 = -1060 -1060 OA Freight paid would decrease cash and retained earning by $1060 and would be cash outflow from operating activity 6 + -6140 + 3120 = + + -3020 -6140 - -3120 = -3020 Sales return would decrease retained earning and accounts receivable by 6140 7 74620 + -74620 + = + + - = 0 74620 OA Cash received $74620 would increase cash and accounts receivable by $74620 and would be cash inflow from opeating activity 8 -69200 + + = -69200 + + - = 0 -69200 OA Cash paid to supplier would decrease cash and accounts payable by $69200 and would be cash out flow from operating actvity 9 -3430 + + = + + -3430 - 3430 = -3430 -3430 OA As advertising expenses are expense, payment would decrease cash and retained earning by $3430 and it would be cash outflow from operationg activity. 10 -3560 + + = + + -3560 - 3560 = -3560 -3560 OA As insurance expenses are expense, payment would decrease cash and retained earning by $3560 and it would be cash outflow from operationg activity. Total $ 61,440.00 + $ 10,240.00 + $ 37,120.00 = $ 12,800.00 + $ 65,000.00 + $ 31,000.00 $ 84,860.00 - $ 53,860.00 = $ 31,000.00 $61,440.00