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Acc 201 Comprehensive cycle problem: Perpetual system




Comprehensive cycle problem: Perpetual system;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 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 inventory that is 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 account 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. 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 customer was paid $710 cash for returned merchandise.;6. Deliver goods FOB destination in Event 4. Freight costs 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.;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.;Balance Sheet;EVENTS Assets = Liability = Equity;Cash + Acct?s Rec. + Mdse, Inv. = Accts Pay. + Ret. Earn.;Income Statement;Rev. - Exp. = Net Inc.;Statement of Cash Flow;c. Prepare an income statement, a statement of changes in stockholders? equity, a balance sheet, and a statement of cash flows.


Paper#80688 | Written in 18-Jul-2015

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