Question

The following events were completed by Yang’s Imports in September 2014.
Sept. 1 Acquired $30,000 cash from the issue of common stock.
1 Purchased $18,000 of merchandise on account with terms 2/10, n/30.
5 Paid $400 cash for freight to obtain merchandise purchased on September 1.
8 Sold merchandise that cost $10,000 to customers for $19,000 on account, with terms 2/10, n/30.
8 Returned $750 of defective merchandise from the September 1 purchase to the supplier.
10 Paid cash for the balance due on the merchandise purchased on September 1.
20 Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period.
30 Paid $2,450 cash for selling expenses.

Required
a. Record each event in a statements model like the following one. The first event is recorded as an example.


b. Prepare an income statement for the month ending September 30.
c. Prepare a statement of cash flows for the month ending September 30.
d. Explain why there is a difference between net income and cash flow from operatingactivities.


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  • CreatedMay 22, 2014
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