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Comprehensive Cycle Problem




Comprehensive Cycle Problem;Problem 3-25 Comprehensive Cycle Problem;At the beginning of 2012, 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 2012, the economy 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 the inventory that it had purchased because the inventory was damaged in transit. The freight company agreed to pay the return freight cost.;3. Paid the amount due on its accounts payable to blue company within the cash discount period.;4. Sold inventory that had cost $3,000 for $5,500 on account under terms 2/10 n/45;5. Received merchandise returned from a customer. The merchandise originally cost $400 and was sold to the customer for $710 cash during the previous accounting period. the coustomer was paid $710 cash for the returned merchandise.;6. Delivered goods FOB destination in event 4. Freight cost of $60 were paid in cash.;7. Collected the amount due on the account receivable within the discount period.;8. Took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.;A. identify these events as asset source (as) asset use (ua) asset exchange (ae) or claims exchange (ce);B. record each event in a statements model like the following one.;balance sheet income statement;[event] assets = liab. = equity rev.-exp.= net inc. [statement of cash flows];cash +accts. rec + mdse.inv = accts pay. + ret earn.;c. prepare an income statement, a statement of changes in stockholders equity, a balance sheet and a statement of cash flows.


Paper#28718 | Written in 18-Jul-2015

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