Milo Clothing experienced the following events during 2018, its first year of operation:
- Acquired $18,500 cash from the issue of common stock.
- Purchased inventory for $6,500 cash.
- Sold inventory costing $3,900 for $6,630 cash.
- Paid $950 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, or NC for net change in cash. If the element is not affected by the event, leave the cell blank
Homework Answers
| MILO CLOTHING | ||||||||||||||
| Effect of Events on the Financial Statements | ||||||||||||||
| Event | Assets | = | Stockholders' Equity | Revenue | - | Expenses | = | Net Income | Statement of Cash Flows | |||||
| Cash | + | Inventory | = | Common Stock | + | Retained Earnings | ||||||||
| 1 | $18500 | + | = | $18500 | + | - | = | $18500 | FA | |||||
| 2 | -6500 | + | 6500 | = | + | - | = | -6500 | OA | |||||
| 3a | 6630 | + | = | + | 6630 | 6630 | - | = |
6630 |
6630 | OA | |||
| 3b | + | -3900 | = | + | -3900 | - | 3900 | = | -3900 | |||||
| 4 | -950 | + | = | + | -950 | - | 950 | = | -950 | -950 | OA | |||
| Total | $17680 | + | $2600 | = | $18500 | + | $1780 | $6630 | - | $4850 | = | $1780 | $17680 | NC |
Add Answer to:
Milo Clothing experienced the following events during 2018, its
first year of operation:
Acquired $18,500 cash...
Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired...
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....
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...
The Pet Store experienced the following events for the 2018 accounting period: Acquired $60,000 cash from...
The Pet Store experienced the following events for the 2018
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Acquired $60,000 cash from the issue of common stock.
Purchased $65,000 of inventory on account.
Received goods purchased in Event 2 FOB shipping point; freight
cost of $900 paid in cash.
Sold inventory on account that cost $38,000 for $71,000.
Freight cost on the goods sold in Event 4 was $620. The goods were
shipped FOB destination. Cash was paid for the freight
cost.
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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...
The Pet Store experienced the following events for the 2018
accounting period:
Acquired $60,000 cash from the issue of common stock.
Purchased $65,000 of inventory on account.
Received goods purchased in Event 2 FOB shipping point; freight
cost of $900 paid in cash.
Sold inventory on account that cost $38,000 for $71,000.
Freight cost on the goods sold in Event 4 was $620. The goods were
shipped FOB destination. Cash was paid for the freight
cost.
Customer in Event 4...
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 $6,800 cash. 3. Sold inventory costing $4,080 for $6,936 cash. 4. Paid $950 for advertising expense Required a. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts c. Prepare a trial balance to prove the equality of debits and credits. Complete this question by...
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Cordell Inc. experienced the following events in 2018, its first
year of operation:
Received $46,000 cash from the issue of common stock.
Performed services on account for $74,000.
Paid a $4,600 cash dividend to the stockholders.
Collected $52,000 of the accounts receivable.
Paid $46,000 cash for other operating expenses.
Performed services for $15,000 cash.
Recognized $1,600 of accrued utilities expense at the end of the
year.
Required
a. & c. Identify the events that result in
revenue or expense recognition...
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