Solution-Effect of inventory transactions on financial

Effect of inventory transactions on financial statements

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Reference no: EM13536041

Effect of inventory transactions on financial statements: perpetual system

Chris Daniels started a small merchandising business in 2010. The business experienced the following events during its first year of operation. Assume that Daniels uses the perpetual inventory system.

1. Acquired $60,000 cash from the issue of common stock.

2. Purchased inventory for $50,000 cash.

3. Sold inventory costing $36,000 for $56,000 cash.

Required

a. Record the events in a statements model like the one shown below.

Assets

Equity

Rev.

Exp.

Net Inc.

Cash Flow

Cash

Inv.

Com. Stk.

Ret. Earn.

b. Prepare an income statement for 2010 (use the multistep format).

c. What is the amount of total assets at the end of the period?

Reference no: EM13536041

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Effect of inventory transactions on financial statements

Reference no: EM13536041

Reference no: EM13536041

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