Question

1. Record the preceding transactions in a horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change. If the account is not affected by the event, leave the cell blank. The beginning balances have been recorded as an example.

2. Prepare a schedule of cost of goods sold and an income statement.
   The following trial balance pertains to Benji's Grocery as of January 1, 2018: Account Title Cash Accounts receivable Merchandise inventory Accounts payable Common stock Retained earnings Beginning Balances $27,000 4,200 52,000 4,200 45,000 34,000 The following events occurred in 2018. Assume that Benji's uses the periodic inventory method. 1. Purchased land for $9,200 cash. 2. Purchased merchandise on account for $98,000, terms 3/10, n/45. 3. Paid freight of $1,100 cash on merchandise purchased FOB shipping point. 4. Returned $3,800 of defective merchandise purchased in Event 2. 5. Sold merchandise for $88,000 cash. 6. Sold merchandise on account for $93,000, terms 1/10, n/30. 7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2 8. Paid $11,800 cash for selling expenses. 9. Collected $52,000 of the accounts receivable from Event 6 within the discount period. 10. Collected $41,000 of the accounts receivable but not within the discount period. 11. Paid $6,600 of other operating expenses. 12. A physical count indicated that $47,800 of inventory was on hand at the end of the accounting period. Required: a. Record the preceding transactions in a horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change. If the account is not affected by the event, leave the cell blank. The beginning balances have been recorded as an example, b. Prepare a schedule of cost of goods sold and an income statement. Complete this question by entering your answers in the tabs below. Req A Req B CGS Sched Req B Inc Stmt Record the preceding transactions in a horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing ac account is not affected by the event, leave the cell blank. The beginning balances have been recorded as an example. (Not every cell will require entry. Enter any decreases to acc with a minus sign.)
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Answer 1

Income Statement Event No. Balance Sheet Assets = Liabilities Accounts Merchandis Accounts Receivable + e Inventory + Land Payable Stockholders' Equity Common Retained Stock Earnings Statement of Cash Flows Cash + = + Revenue Expenses = Net Income + = $ 4,200 + $ 45,000 + $ 34,000 + + 9,200 + (9,200) + + + 98,000 + + + + + + (1,100) + + = (3.800) + + 88,000 + + + = 88,000 93,000 88,000 93,000 88,000 93,000 + + + Beginning Balance $ 27,000 + $ 4,200 + $ 52,000 1 (9,200) 2 98,000 3 (1,100) 1,100 4 (3,800) 5 88,000 6 93,000 7a (91,374) 7b. (2,826) 8 (11,800) 9 51,480 (52,000) 10 41,000 (41,000) 11 (6,600) 12 47,800 + + + (94,200) + + (91,374) IA NA ОА NA OA NA OA NA OA OA ОА OA NA + + + + + + + + + + (11,800) (520) 11,800 520 (11,800) (520) + + = + - (11,800) 51,480 41,000 (6,600) + + + = + + 6,600 = (6,600) (6,600) 47,800 + + + Total $ 87,406 + $ 4,200 + $ 192,274 + $ 9,200 = $ 4,200 + $ 45,000 + $ 243,880 $ 181,000 $ 18,920 = $ 162,080 $ 60,406 Assets $ 293,080 liabilites $ 4,200 Stockholders' Equity $ 288,880 Liabilities and SHE$ 293,080 7b. 9 Discount = ($98,000-3,800] =$94,200 * 3% = $2,826 Discount = [$52,000] * 1% = $520

BENJI'S GROCERY Schedule of COGS For the year ended DEC,31,2018 Beginning Inventory $ 52,000 Purchases 98,000 Purchase Discount (2,826) Purchase Returns and Allowances (3,800 Transportation In 1,100 Net Purchases $ 92,474 Cost of goods available for sale Ending Inventory Cost of goods sold BENJI'S GROCERY Income Statement For the year ended DEC,31,2018 Revenues: Sales $ 181,000 Less: Sales Discount (520) Net Sales $ Less: Cost of goods sold Gross Profit $ Operating Expenses: Other Operating Expenses (6,600) Selling Expenses (11,800 Total Operating Expenses Net Income $ 180,480 (96,674) 83,806 $ 144,474 (47,800 $ 96,674 (18,400) 78,274

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