Expert Computers was started in 2018. The company experienced the following accounting events during its first year of operation:

1. Started business when it acquired $40,000 cash from the issue of common stock.

2. Purchased merchandise with a list price of $32,000 on account, terms 2/10, n/30.

3. Paid off one-half of the accounts payable balance within the discount period.

4. Sold merchandise on account for $28,000. Credit terms were 1/20, n/30. The merchandise had cost Expert Computers $16,000.

5. Collected cash from the account receivable within the discount period.

6. Paid $2,100 cash for operating expenses.

7. Paid the balance due on accounts payable. The payment was not made within the discount period.

Gross Margin and Net income

Record the events in a horizontal statements model below. In the Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing act and NA to indicate accounts not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) EXPERT COMPUTERS Horizontal Statements Model for 2018 Liabilities+ Accoun Stockholders' Equity Income Statement Assets Accounts Statement of Cash Flows Event Retalned Net Cash Stock Expenses = Income 40,000+ 40,000 FA O NA 40,000+ 2. 3. 4a. 4b 5. 6. 32,000 32,000 + End. 000+ Bal 01 + | 32.000| = | 32.000| + | 40,000| 01 40,000