Powell Company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. During 2018, Powell experienced the following events:
Sold merchandise costing $58,000 for $99,500 on account to Prentise Furniture Store.
Delivered the goods to Prentise under terms FOB destination. Freight costs were $900 cash.
Received returned goods from Prentise. The goods cost Powell $4,000 and were sold to Prentise for $5,900.
Granted Prentise a $3,000 allowance for damaged goods that Prentise agreed to keep.
Collected partial payment of $81,000 cash from accounts receivable.
Required
Record the events in a statements model shown below.
Prepare an income statement, a balance sheet, and a statement of cash flows.
Why would Prentise agree to keep the damaged goods?
Help Sev” Exit Submit Check my work 0 for $99,500 an aturnt to PrenseF 2. Delivered the gooes to Prentise under terms FOB destination. Freight costs were 5900 cash. 3. Receved returned goods from Prentise. The goods cost Powell $4,000 and were sold to Prentse ro 5.900. 4. Granted Prentise a $3,00 allawanre for damaged goads that Prentise agreed to keep 5. Cellected partial payment of 531,000 cesh from accounts receiveble. oinls a. Recod thr rvents in a statements model shown elaw .Why would Prentise agree to keep the damaged 0oods? Complete this question by entering your ansvwers in the tabs below. Req A Req Bl Req B2 Req B3 Rea C Reoord the evente in a statements medel shown below. (Enter any decreases to ancount balances and cash outlows with a mins signin the Cash Flow oolumn, use the initials 0A to designate opera ng activity, 1A for investing ct vity, FA forfinancing activity, and NA for no affcct.) Assels Stuckhoklers Equity Common Relained Reanius-ExpAnSAR Income Stutement Event Statement of Cash No.Cash 6000 60,000 60,000 2al. 40000 1b 3b Total 60,00066,000 Req 1> く上new 5of51 . Next >
