Problem $3-28$A $($Algo$)$ Comprehensive cycle problem: Periodic system $($Appendix$)$ LO $3-9$

The following listing of accounts pertains to Benji's Grocery as of January $1,$ Year $2$:

Account Title Beginning Balances

Cash $ $26,500$

Accounts receivable $4,100$

Merchandise inventory $51,000$

Accounts payable $4,100$

Common stock $44,000$

Retained earnings $33,500$

The following events occurred in Year $2.$ Assume that Benji$$s uses the periodic inventory method.

Purchased land for $$9,100$ cash.

Purchased merchandise on account for $$97,000,$ terms $2/10,$ n$/45.$

Paid freight of $$1,050$ cash on merchandise purchased FOB shipping point.

Returned $$3,700$ of defective merchandise purchased in Event $2.$

Sold merchandise for $$87,000$ cash.

Sold merchandise on account for $$91,500,$ terms $3/10,$ n$/30.$

Paid cash within the discount period on accounts payable due on merchandise purchased in Event $2.$

Paid $$11,700$ cash for selling expenses.

Collected $$51,000$ of the accounts receivable from Event $6$ within the discount period.

Collected $$40,500$ of the accounts receivable but not within the discount period.

Paid $$6,500$ of other operating expenses.

A physical count indicated that $$47,700$ of inventory was on hand at the end of the accounting period.

Required

Record the preceding transactions in a horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change. If the account is not affected by the event, leave the cell blank. The beginning balances have been recorded as an example.

Prepare a schedule of cost of goods sold and an income statement.