Howard Company's first year in operation was 2014. The following events occurred in 2014:
1. Acquired $400 stock from issuing common stock.
2. Purchased inventory on account for $300, terms 2/10, n/30.
3. Sold inventory that had cost $210 for $360 cash.
4. Paid for the goods referred to in item 2 within the discount period.
Required:
a) Record the events in the statements model, below. Show amounts of increases and decreases. Indicate whether each cash flow is an operating activity, investing activity, or financing activity. Calculate the total for each account at the end of the period.
b) What was the amount of total assets at the end of the period?
c) What was the amount of retained earnings at the end of the period?

Question

Howard Company's first year in operation was 2014. The following events occurred in 2014:
1. Acquired $400 stock from issuing common stock.
2. Purchased inventory on account for $300, terms 2/10, n/30.
3. Sold inventory that had cost $210 for $360 cash.
4. Paid for the goods referred to in item 2 within the discount period.
Required:
a) Record the events in the statements model, below. Show amounts of increases and decreases. Indicate whether each cash flow is an operating activity, investing activity, or financing activity. Calculate the total for each account at the end of the period.  
b) What was the amount of total assets at the end of the period?
c) What was the amount of retained earnings at the end of the period?

Quizplus · Accepted Answer

The Answer of Howard Company's first year in operation was 2014. The following events occurred in 2014:
1. Acquired $400 stock from issuing common stock.
2. Purchased inventory on account for $300, terms 2/10, n/30.
3. Sold inventory that had cost $210 for $360 cash.
4. Paid for the goods referred to in item 2 within the discount period.
Required:
a) Record the events in the statements model, below. Show amounts of increases and decreases. Indicate whether each cash flow is an operating activity, investing activity, or financing activity. Calculate the total for each account at the end of the period.  
b) What was the amount of total assets at the end of the period?
c) What was the amount of retained earnings at the end of the period?

Howard Company's First Year in Operation Was 2014