THE PET STORE Horizontal Statements Model for Year 1 \begin{tabular}{|c|l|} \hline Transaction & \multicolumn{2}{|c|}{ Cost } \\ \hline 1. & \\ \hline 2. & Product costs \\ \hline 3. & Product costs \\ \hline 4. & \\ \hline 5. & \\ \hline 6. & \\ \hline 7. & \\ \hline 8. & \\ \hline 9. & Period costs \\ \hline 10. & Period costs \\ \hline \end{tabular} The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $70,000 cash from the issue of common stock. 2. Purchased $61,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,870 paid in cash. 4. Sold inventory on account that cost $51,000 for $97,000. 5. Freight cost on the goods sold in Event 4 was $1,020. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $4,540 worth of goods that had a cost of $2,320. 7. Collected $79,540 cash from accounts receivable. 8. Paid $56,200 cash on accounts payable. 9. Paid $3,020 for advertising expense. 10. Paid $4,050 cash for insurance expense. Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? b. Record the above 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. The first event is recorded as an example