Question

Powell Company began the 2018 accounting period with $40,000 cash, $78,000 Inventory, $59,000 common stock, and $59.000 retained earnings. During 2018, Powell experienced the following events 1. Sold merchandise costing $49,000 for $103,000 on account to Prentise Furniture Store 2. Dellvered the goods to Prentise under terms FOB destination. Freight costs were $900 cash. 3. Received returned goods from Prentise. The goods cost Powell $5,000 and were sold to Prentise for $7400 4. Granted Prentise a $3.000 allowance for damaged goods that Prentise agreed to keep 5. Collected partial payment of $83,000 cash from accounts receivable. Required a. Record the events in a statements model shown below. b. Prepare an income statement, a balance sheet, and a 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. Reg A Req B1 Req B2 Reg 3 Reqc 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 come the OA to designate operating activity, IA for investing activity, FA for financing activity, and for no affect, leave the cell bank. Not every cel will require entry) Event No POWELL COMPANY Financial Statements Model for 2018 Assets Stockholders' Equity Income Statement Accounts Common Cash Net Retained Revenue - Inventory Receivable Stock Earnings Expenses Income 40,000+ 78.000 - 50,000 50,000 Statement of Cash Flows Bal + - . 2 - . 5 0 70.000 59.000 30.000 Total 40.000 Regi)

Answer 1

Please hit LIKE button if this helped. a. PowellCompany Effect of Events on the Financial Statements No. Bal. 1a. 1b. Assets Equity Rev. Exp. Net. Inc. Cash Flow Cash A. Rec. Inv. C. Stock Ret. Earn. $ 40,000 NA $ 78,000 $ 59,000 $ 59,000 NA NA NA NA NA $ 103,000 NA NA $ 103,000 $ 103,000 $ $ 103,000 NA NA NA $ -49,000 NA $ -49,000 $ $ 49,000 $ -49,000 NA $ -900 NA NA NA $ -900 $ $ 900 $ -900 $ -900 OA NA $ -7,400 NA NA $ -7,400 $ -7,400 $ $ -7,400 NA NA NA $ 5,000 NA $ 5,000 $ $ -5,000 $ 5,000 NA NA $ 3,000 NA NA $ -3,000 $ -3,000 $ $ -3,000 NA $ 83,000 $ -83,000 NA NA NA NA NA NA $ 83,000 OA 2 - За. 3b. 4 5 Tot. $ 122,100 $ 9,600 $ 34,000 $ 59,000 $ 106,700 $ 92,600 $ 44,900 $ 47,700 $ 82,100 b. Income Statement $ 92,600 $ -44,000 $ 48,600 Net Sales Cost of Goods Sold Gross Margin Operating Expenses: Transportation-out Net Income $ -900 $ 47,700 Balance Sheet $ 122,100 $ 9,600 $ 34,000 Assets Cash Accounts Receivable Merchandise Inventory Total Assets Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $ 165,700 $ $ 59,000 $ 106,700 $ 165,700 $ 165,700

Statement of Cash Flows Cash Flows From Operating Activities: Cash Inflow from Customers Cash Outflow for Expenses Net Cash Flow from Operating Activities $ $ 83,000 -900 $ 82,100 Cash Flows From Investing Activities $ Cash Flows From Financing Activities $ - Net Change in Cash Plus: Beginning Cash Balance Ending Cash Balance $ 82,100 $ 40,000 $ 122,100 Part c Prentis already has the goods and, assuming the goods can be sold, will not have to wait for another shipment. Prentise is getting the goods at a reduced price.