Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. Acquired $35,000 cash from the issue of common stock. Purchased inventory for $28,000 cash. Sold inventory costing $17,500 for $30,500 cash. Required: Record the events in a horizontal financial statements model. Prepare an income statement for Year 1 (use the multistep format). What is the amount of total assets at the end of the period?

Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. Acquired $35,000 cash from the issue of common stock. Purchased inventory for $28,000 cash. Sold inventory costing $17,500 for $30,500 cash. Required: Record the events in a horizontal financial statements model. Prepare an income statement for Year 1 (use the multistep format). What is the amount of total assets at the end of the period?

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 1CP

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Required:

Record the events in a horizontal financial statements model.
Prepare an income statement for Year 1 (use the multistep format).
What is the amount of total assets at the end of the period?

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