3 The following events were completed by Yang\'s Imports in September 2014 1Acqu

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3 The following events were completed by Yang's Imports in September 2014 1Acquired $30,000 cash from the issue of common stock 1 Purchased $18,000 of merchandise on account with terms 2/10, n/30 5 Paid $400 cash for freight to obtain merchandise purchased on September 1 8 Sold merchandise that cost $10,000 to customers for $19,000 on account, with terms 2/10, n/30 8 Returned $750 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 Sept. 20 Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period 30 Paid $2,450 cash for selling expenses. Required a. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) YANG'S IMPORTS Effect of Transactions on Financial Statements Using Horizontal Statements Model Balance Sheet Income Statement Liabilities + Stockholders' Equity Statement of Cash Flows Assets Accounts Receivable+InventoryAccounts Date Net Retained Revenue -Expenses Earnings = Income CashReceivable Payable Stock 30,000 + 0,000+ 30,000 FA 9/5 9/8a 9/8b 9/8 9/10 9/20 9/30 Tota S 30,000S 0S 30,000$ 0 $ 30,000

Explanation / Answer

Statement Cash A/R inventory A/P CS RE Revenue Expenses net income cash flow 1-Sep 30,000 30,000 30,000 FA 1-Sep 18,000 18,000 NA 5-Sep -400 400 -400OA 9/8-a 19,000 19,000 19,000 19,000 NA 9/8-b -10,000 -10,000 -10,000 -10,000 NA 8-Sep -750 -750 NA 10-Sep -16,905 -345 -17,250 -16,905 OA 20-Sep 19,000 -19,000 19,000OA 30-Sep -2450 -2,450 -2,450 -2,450 -2,450OA total 29,245 0 7305 0 30,000 6550 19000 -12450 6550 29,245 income statement Sales 19,000 less cost of goods sold 10,000 Gross profit 9,000 less selling expense 2,450 Net income 6550 Statement of cash flow Cash flows from operating activities cash from sales 19,000 Cash paid for purchase of goods -17305 cash paid for selling expense -2450 Net cash flow from operating activities -755 Cash flow from investing activities 0 Cash flow from financing activity Cash from issue of common stock 30,000 Net increase In cash 29245 Cash at the beginning 0 Cash at year end 29,245

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