Poole Company began the 2014 accounting period with $36,000 cash, $80,000 inventory, $70,000 common stock, and $46,000
Question:
1. Sold merchandise costing $51,500 for $92,900 on account to Mables General Store.
2. Delivered the goods to Mables under terms FOB destination. Freight costs were $500 cash.
3. Received returned goods from Mables. The goods cost Poole Company $3,200 and were sold to Mables for $4,700.
4. Granted Mables a $1,500 allowance for damaged goods that Mables agreed to keep.
5. Collected partial payment of $71,000 cash from accounts receivable.
Required
a. Record the events in a statements model like the one shown below.
b. Prepare an income statement, a balance sheet, and a statement of cash flows.
c. Why would Poole grant the $1,500 allowance to Mables? Who benefitsmore?
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Related Book For
Survey of Accounting
ISBN: 978-0077862374
4th edition
Authors: Thomas Edmonds, Christopher, Philip Olds, Frances McNair, Bor
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