Comprehensive cycle problem: Perpetual System At the beginning…
Comprehensive cycle problem: Perpetual System
At the beginning of 2011, the Jeater Company had the following balances in its accounts: Cash $4,300 Inventory $9,000 Common Stock $10,000 Retained Earnings $3,300 During 2011, the company experienced the following events.
1) purchased inventory that cost $2,200 on account from blue company under terms 1/10,n/30. the merchandise was delivered FOB shipping point. freight costs of $110 were paid in cash.
2)returned $200 of inv. that it had purchased b/c inv. was damaged in transit. The freigh co. agreed to pay return freight cost.
3) paid amnt due on account payable to blue co. w/in cash discount period
4) sold inv. that had cost $3,000 for $5,500 on accnt under terms 2/10,n/45
5) receive merch returned from a customer. merch originally cost $400 and was sold to customer for $710 cash. The customer was paid $710 cash for returned merch
6) delivered goods FOB destination in event 4. freight costs of $60 were paid in cash
7) collected amnt due on accounts receivable w/in discount period
8) took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.
Required
a. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).
b. Record each event in a statements model like the following one.
c. Prepare an income statement, a statement of changes in stockholders equity, a balance sheet, and a statement of cash flows.
At the beginning of 2011, the Jeater Company had the following balances in its accounts: Cash $4,300 Inventory $9,000 Common Stock $10,000 Retained Earnings $3,300 During 2011, the company experienced the following events.
1) purchased inventory that cost $2,200 on account from blue company under terms 1/10,n/30. the merchandise was delivered FOB shipping point. freight costs of $110 were paid in cash.
2)returned $200 of inv. that it had purchased b/c inv. was damaged in transit. The freigh co. agreed to pay return freight cost.
3) paid amnt due on account payable to blue co. w/in cash discount period
4) sold inv. that had cost $3,000 for $5,500 on accnt under terms 2/10,n/45
5) receive merch returned from a customer. merch originally cost $400 and was sold to customer for $710 cash. The customer was paid $710 cash for returned merch
6) delivered goods FOB destination in event 4. freight costs of $60 were paid in cash
7) collected amnt due on accounts receivable w/in discount period
8) took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.
Required
a. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).
b. Record each event in a statements model like the following one.
c. Prepare an income statement, a statement of changes in stockholders equity, a balance sheet, and a statement of cash flows.
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