Dan Watson started a small merchandising business in 2016 The
Dan Watson started a small merchandising business in 2016. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system.
1. Acquired $30,000 cash from the issue of common stock.
2. Purchased inventory for $18,000 cash.
3. Sold inventory costing $15,000 for $32,000 cash.
Required
a. Record the events in general journal format.
b. Post the entries to T-accounts.
c. Prepare an income statement for 2016 (use the multistep format).
d. What is the amount of net cash flow from operating activities for 2016?
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