just need help with the wrong areas Exercise 316 Effect of s

just need help with the wrong areas

Exercise 3-16 Effect of sales returns and allowances and freight costs on the financial statements: Perpetual system LO 3-4 Powell Company began the 2018 accounting period with $43,000 cash, 589,000 inventory. $63,000 common stock, and $69,000 retained earnings. During 2018, Powell experienced the following events 1. Sold merchandise costing $59,500 for $102,500 on account to Prentise Furniture Store 3. Received returned goods from Prentise. The goods cost Powell $4,300 and were sold to Prentise for $5,400 to Prentise under terms FOB destination. Freight costs were $1,000 cash. 4. Granted Prentise a $3,300 allowance for damaged goods that Prentise agreed to kee cash from accounts receivable Required a. Record the events in a statements model shown below b. Prepare an income statement, a balance sheet, and a statement of cash flows c. Why would Prentise agree to keep the damaged goods? 3 Answer is not complete. Complete this question by entering your answers in the tabs Req A Req B1 Req B2 Rea B3 Req C Record the events in a statements model shown below. (Enter any decreases to account balances an to designate operating activity, IA for investing activity, FA for financing actvity, and NA h outflaws with a minus sign. In the Cash Flow column, use the initials OA ANY Financial Statements Model for 2018

Solution

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Income Statement
Net sales(102500-5400-3300)	$          93,800
Cost of Goods Sold(59500-4300)	$          55,200
Gross Margin	$          38,600
Operating Expesnes
Freight- Transportation	$            1,000
Net Income	$          37,600