Milo Clothing experienced the following events during 2018, its first year of op
ID: 2337782 • Letter: M
Question
Milo Clothing experienced the following events during 2018, its first year of operation: 1. Acquired $15,000 cash from the issue of common stock. 2. Purchased inventory for $6,800 cash 3. Sold inventory costing $4,080 for $6,936 cash. 4. Paid $850 for advertising expense Required Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) Answer is complete but not entirely correct MILO CLOTHING Effect of Events on the Financial Statements Assets Stockholders' Equity Net Income Statement of Cash Flows Event InventoryCommon 15,000 Revenue Expenses | Retained +Earning Cash 15,000 (6800) 6,936 Stock 6,800 (4,080) 2,720 6,9366,936 (4,080) 3b ,080 (15,000) 850 4930 |# Total 136 + 15,000+ 2,856 6.936Explanation / Answer
2) Single Step Income Statement :-
Multi Step Income Statement :-
3) Income Statement :-
Particulars Amount($) Revenues :- Net Sales Revenue 1040 Less : Expenses :- Cost Of Goods Sold 600 Advertising Expenses 200 Interest Expenses 66 Salaries Expenses 170 Rent Expense 100 Total Expenses (1136) Add : Gain on Sale of land 79 Net Income/(Loss) (17)