Exercise $3-4$A $($Algo$)$ Effect of inventory transactions on the income statement and statement of cash flows: Perpetual system LO $3-1$

During Year $1,$ Hardy Merchandising Company purchased $$28,000$ of inventory on account. Hardy sold inventory on account that cost $$21,000$ for $$31,500.$ Cash payments on accounts payable were $$17,500.$ There was $$28,000$ cash collected from accounts receivable. Hardy also paid $$4,800$ cash for operating expenses. Assume that Hardy started the accounting period with $$22,000$ in both cash and common stock.

Required

Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank.

What is the balance of accounts receivable at the end of Year $1?$

What is the balance of accounts payable at the end of Year $1?$

What are the amounts of gross margin and net income for Year $1?$

Determine the amount of net cash flow from operating activities.