Exercise 4-2A (Algo) Effect of inventory transactions on journals, ledgers, and financial statements: Perpetual system LO 4-1

Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system.

1. Acquired $28,500 cash from the issue of common stock.
2. Purchased inventory for $22,800 cash.
3. Sold inventory costing $17,000 for $31,500 cash.

required A- Record the events in general journal format.

required B- Post the entries to T-accounts.

required C- Determine the amount of gross margin.

required D- What is the amount of net cash flow from operating activities for Year 1?