Powell Company began the 2018 accounting period with $43,000 cash, $89,000 inven

ID: 2390843 • Letter: P

Question

Powell Company began the 2018 accounting period with $43,000 cash, $89,000 inventory, $63,000 common stock, and $69,000 retained earnings. During 2018, Powell experienced the following events:

Sold merchandise costing $59,500 for $102,500 on account to Prentise Furniture Store.

Delivered the goods to Prentise under terms FOB destination. Freight costs were $1,000 cash.

Received returned goods from Prentise. The goods cost Powell $4,300 and were sold to Prentise for $5,400.

Granted Prentise a $3,300 allowance for damaged goods that Prentise agreed to keep.

Collected partial payment of $83,500 cash from accounts receivable.

Required

Record the events in a statements model shown below.

Prepare an income statement, a balance sheet, and a statement of cash flows.

Why would Prentise agree to keep the damaged goods?

10 Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus to designate operating activity, IA for investing activity, FA for financing activity, and NA for no affect.) Assets Accounts Event No. POWELL COMPANY Financial Statements Model for 2018 = Stockholders' Equity Income Statement Common Retained Net Revenue - Expenses Stock Earnings Income 89,000 = 63,000 + 69,000 Statement of Cash Flows points Cash + Receivable + Inventory = X 01:15:36 Bal. 43,000 + 1a. 1b. + eBook + + 11111111111 + + + + + 43,000 + Total 0 + 63,000 + 89,000 = 69,000 Prey 19 of 14 Next >

Explanation / Answer

Financial statemens model for 2018

Income statement

Balance sheet

Statement of cash flows

No. Assets Stockholder's Equity Income Statement Statement of Cash flows Cash + Accts
Rec. + Inventory = Common stock + Retained
Earnings Revenue - Expenses = Net
Income Bal. 43000 + + 89000 = 63000 + 69000 1a. -59500 -59500 59500 -59500 NA 1b. 102500 102500 102500 102500 NA 2. -1000 -1000 1000 -1000 -1000 OA 3a. 4300 4300 -4300 4300 NA 3b. -5400 -5400 -5400 -5400 NA 4. -3300 -3300 3300 -3300 -3300 OA 5. 83500 -83500 83500 OA Total 122200 + 13600 + 33800 = 63000 + 106600 97100 - 59500 = 37600 79200 OA

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Powell Company began the 2018 accounting period with $35,000 cash, $73,000 inven

Powell Company began the 2018 accounting period with $43,000 cash, $89,000 inven

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Powell Company began the 2018 accounting period with $43,000 cash, $89,000 inven

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