The following trial balance pertains to Mitchell Home Products as of January 1, 2010.

The following events occurred in 2010. Assume that Mitchell Home Products uses the periodic inventory system.
1. Purchased land for $8,000 and a building for $53,000 cash.
2. Purchased merchandise on account for $23,000, terms 2/10 n/30.
3. The merchandise purchased was shipped FOB shipping point for $230 cash.
4. Returned $2,000 of defective merchandise purchased in Event 2.
5. Sold merchandise for $27,000 cash.
6. Sold merchandise on account for $50,000, terms 1/20 n/30.
7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
8. Paid $1,200 cash for selling expenses.
9. Collected $35,000 of accounts receivable within the discount period.
10. Collected $12,000 of accounts receivable but not within the discount period.
11. Performed a physical count indicating that $30,000 of inventory was on hand at the end of the accounting period.
Required
a. Record the above transactions in a horizontal statements model like the following one.

b. Prepare a schedule of cost of goods sold and an incomestatement.

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Account Title Debit Credit Cash Accounts receivable Merchandise inventory Accounts payable Common stock Retained earnings $14,000 9,000 60,000 $ 5,000 70,000 8,000 83,000 $83,000 Total Balance Sheet Income Statement Rev - Exp. = Net Inc.| Statement of Event Assets Equity Cash Flows Mdse. Accts. Com. Pay. + Stock + Earn. Accts. Ret. Cash + Rec. + Inv. + Land