Iupe Supply Company had the following transactions in 2014:
1. Acquired $50,000 cash from the issue of common stock.
2. Purchased $120,000 of merchandise for cash in 2014.
3. Sold merchandise that cost $95,000 for $180,000 during the year under the following terms:
$ 50,000 Cash sales
115,000 Credit card sales (The credit card company charges a 3 percent service fee.)
15,000 Sales on account
4. Collected all the amount receivable from the credit card company.
5. Collected $11,300 of accounts receivable.
6. Paid selling and administrative expenses of $51,500.
7. Determined that 5 percent of the ending accounts receivable balance would be uncollectible.

a. Record the above events in a horizontal statements model like the following one. When you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). The letters NA indicate that an element is not affected by the event.

b. Prepare an income statement, a statement of changes in stockholders’ equity, a balance sheet, and a statement of cash flows for2014.

  • CreatedMay 22, 2014
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