Nigil Co. experienced the following events for the 2010 accounting period: 1. Acquired $10,000 cash from the
Question:
Nigil Co. experienced the following events for the 2010 accounting period:
1. Acquired $10,000 cash from the issue of common stock.
2. Purchased $18,000 of inventory on account.
3. Received goods purchased in Event 2 FOB shipping point. Freight cost of $500 paid in cash.
4. Returned $4,000 of goods purchased in Event 2 because of poor quality.
5. Sold inventory on account that cost $14,300 for $44,000.
6. Freight cost on the goods sold in Event 5 was $100. The goods were shipped FOB destination.
Cash was paid for the freight cost.
7. Collected $16,500 cash from accounts receivable.
8. Paid $12,000 cash on accounts payable.
9. Paid $2,200 for advertising expense.
10. Paid $4,400 cash for insurance expense.
Required
a. Which of these transactions result in period (selling and administrative) costs? Which result in product costs? If neither, label the transaction NA.
b. Record each event in a horizontal statements model like the following one. The first event is recorded as anexample.
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Step by Step Answer:
a Transaction Period Costs Product Costs Not Applicable 1 b 2 b 3 b 4 b 5 b 6 b 7 b 8 b 9 b 10 b b N...View the full answer
