Answered

1 Acquired $45,000 cash from the issue of common stock.
1 Purchased $30,500 of merchandise on account with terms 2/10, n/30.
5 Paid $900 cash for freight to obtain merchandise purchased on September 1.
8 Sold merchandise that cost $10,250 to customers for $17,000 on account, with terms 2/10, n/30.
8 Returned $850 of defective merchandise from the September 1 purchase to the supplier.
10 Paid cash for the balance due on the merchandise purchased on September 1.
20 Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period.
30 Paid $3,000 cash for selling expenses.

Required
Record each event in a statements model like the following one. 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. The first event is recorded as an example.
Prepare an income statement for the month ending September 30.
Prepare a statement of cash flows for the month ending September 30.

Answer :

anthougo

1. Recording each event in a statement's model is as follows:

                                              Assets  = Liabilities + Equity

                 Cash  Accounts  Inventory Accounts  Common Stock Retained

                          Receivable                   Payable                              Earnings

Sept. 1  $45,000                                                             $45,000                IA

Sept. 1                                  $30,500     $30,500                                      OA

Sept. 5       -900                                                                                   -$900 (Freight-in Expenses) OA

Sept. 8                   $17,000                                                              $17,000 (Sales Revenue) OA

                                           -$10,250                                              -$10,250 (Cost of goods sold) OA

Sept. 8                                    -$850         -$850                                       OA

Sept. 10   -$29,057                              -$29,650                                $593 (Cash Discounts) OA

Sept. 20    $17,000 $17,000                                                                     OA

Sept. 30    -$3,000                                                                         -$3,000 (Selling Expenses) OA

Total        $29,043  $0      $19,400        $0               $45,000      $3,443

2. An Income Statement for the month ended September 30:

Sales Revenue      $17,000

Cost of goods sold 10,250

Freight-in Expenses   900

Gross profit            $5,850

Selling Expenses    (3,000)

Discounts                    593

Net Income            $3,443

3. A Statement of Cash Flows for the month ended September 30:

Net income                      $3,443

Increase in inventory      (19,400)

Cash from operations  ($15,957)

Financing Activities:

Common Stock           $45,000

Cash Flows                  $29,043

Transaction Analysis:

Sept. 1 Cash $45,000 Common Stock $45,000

Sept. 1 Inventory $30,500 Accounts Payable $30,500

terms 2/10, n/30.

Sept. 5 Freight-in $900 Cash $900

Sept. 8 Accounts Receivable $17,000 Sales Revenue $17,000

Cost of goods sold $10,250 Inventory $10,250

terms 2/10, n/30.

Sept. 8 Accounts Payable $850 Inventory $850

Sept. 10 Accounts Payable $29,650 Cash $29,057 Cash Discounts $593

Sept. 20 Cash $17,000 Accounts Receivable $17,000

Sept. 30 Selling Expenses $3,000 Cash $3,000

Learn more about the financial statement model at https://brainly.com/question/24719795

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