Expert Computers was started in 2018 The company experienced

Expert Computers was started in 2018. The company experienced the following accounting events during its first year of operation:

Started business when it acquired $81,000 cash from the issue of common stock.

Purchased merchandise with a list price of $65,000 on account, terms 3/10, n/30.

Paid off one-half of the accounts payable balance within the discount period.

Sold merchandise on account for $52,800. Credit terms were 2/20, n/30. The merchandise had cost Expert Computers $31,700.

Collected cash from the account receivable within the discount period.

Paid $9,700 cash for operating expenses.

Paid the balance due on accounts payable. The payment was not made within the discount period.

Required

Record the events in a horizontal statements model below. In the Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. The first event is recorded as an example.

What is the amount of gross margin for the period? What is the net income for the period?

xam 1 Saved Help Save & Exit Submit change in cash and NA to indicate accounts not affected by the event. The first event is recorded as an example. (Enter any decreas- 14 EXPERT COMPUTERS Horizontal Statements Model for 2018 Assets LiabilitiesStockholders\' Equity Accounts Common | + Retained Revenue-Expenses |=| Income Income Statement vent Accounts Inventory Payable Statem Net + InventoryA Stock Earnings ints 81,000+ +81,000+ 81,00 2 01:10:03 4a. 4b eBook 81,000+ 0 + +81,000+ 0 81,0C 0

Solution

Answers

Balance Sheet

Income Statement

Event No

Assets

=

Liabilities

+

Stockholder\'s Equity

Cash Flow

Cash

+

Accounts receivables

+

Inventory

=

Accounts Payable

+

Common Stock

+

Retained earnings

Rev.

-

Exp.

=

Net Income

1

$                                                     81,000.00

+

$                            -  

+

=

$                        -  

+

$         81,000.00

+

$                        -  

-

$                      -  

=

$                      -  

$   81,000.00

FA

2

+

$                            -  

+

$         65,000.00

=

$         65,000.00

+

+

$                        -  

-

$                      -  

=

$                      -  

$                   -  

NA

3

$                                                  (31,525.00)

+

+

$            (975.00)

=

$       (32,500.00)

+

+

$                      -  

$ (31,525.00)

OA

4a

+

$             52,800.00

+

=

+

+

$    52,800.00

$         52,800.00

$      52,800.00

$                   -  

NA

4b

+

+

$      (31,700.00)

=

+

+

$ (31,700.00)

$      31,700.00

$    (31,700.00)

$                   -  

NA

5

$                                                     51,744.00

+

$           (52,800.00)

+

=

+

+

$    (1,056.00)

$         (1,056.00)

$      (1,056.00)

$   51,744.00

OA

6

$                                                     (9,700.00)

+

+

=

+

+

$    (9,700.00)

$         9,700.00

$      (9,700.00)

$   (9,700.00)

OA

7

$                                                  (32,500.00)

+

+

=

$       (32,500.00)

+

+

$                      -  

$ (32,500.00)

OA

Ending Balance

$                                                     59,019.00

+

$                            -  

+

$         32,325.00

=

$                        -  

+

$         81,000.00

+

$    10,344.00

$         51,744.00

$                       -  

$      41,400.00

$                     -  

$      10,344.00

$   59,019.00

NC

Total Sales revenue

$                                 52,800.00

Sales Discount

$                                 (1,056.00)

A

Net Sales

$                                 51,744.00

B

Cost of Goods Sold

$                                 31,700.00

C=A-B

Gross Margin

$                                 20,044.00

D

Operating expenses

$                                    9,700.00

E=C-D

Net Income

$                                 10,344.00

	Balance Sheet	Income Statement
Event No	Assets	=	Liabilities	+	Stockholder\'s Equity	Cash Flow
	Cash	+	Accounts receivables	+	Inventory	=	Accounts Payable	+	Common Stock	+	Retained earnings	Rev.	-	Exp.	=	Net Income
1	$                                                     81,000.00	+	$                            -	+		=	$                        -	+	$         81,000.00	+		$                        -	-	$                      -	=	$                      -	$   81,000.00	FA
2		+	$                            -	+	$         65,000.00	=	$         65,000.00	+		+		$                        -	-	$                      -	=	$                      -	$                   -	NA
3	$                                                  (31,525.00)	+		+	$            (975.00)	=	$       (32,500.00)	+		+						$                      -	$ (31,525.00)	OA
4a		+	$             52,800.00	+		=		+		+	$    52,800.00	$         52,800.00				$      52,800.00	$                   -	NA
4b		+		+	$      (31,700.00)	=		+		+	$ (31,700.00)			$      31,700.00		$    (31,700.00)	$                   -	NA
5	$                                                     51,744.00	+	$           (52,800.00)	+		=		+		+	$    (1,056.00)	$         (1,056.00)				$      (1,056.00)	$   51,744.00	OA
6	$                                                     (9,700.00)	+		+		=		+		+	$    (9,700.00)			$         9,700.00		$      (9,700.00)	$   (9,700.00)	OA
7	$                                                  (32,500.00)	+		+		=	$       (32,500.00)	+		+						$                      -	$ (32,500.00)	OA
Ending Balance	$                                                     59,019.00	+	$                            -	+	$         32,325.00	=	$                        -	+	$         81,000.00	+	$    10,344.00	$         51,744.00	$                       -	$      41,400.00	$                     -	$      10,344.00	$   59,019.00	NC