Powell Company began the Year 3 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retain

Question

3 years ago

14

Powell Company began the Year 3 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retain

ed earnings. During Year 3, Powell experienced the following events: Sold merchandise costing $58,000 for $99,500 on account to Prentise Furniture Store. Delivered the goods to Prentise under terms FOB destination. Freight costs were $900 cash. Received returned goods from Prentise. The goods cost Powell $4,000 and were sold to Prentise for $5,900. Granted Prentise a $3,000 allowance for damaged goods that Prentise agreed to keep. Collected partial payment of $81,000 cash from accounts receivable. Required Record the events in a statements model shown below. Prepare an income statement, a balance sheet, and a statement of cash flows. Why would Prentise agree to keep the damaged goods

Business

1 answer:

mario62 [17] · Answer 1 · 2022-06-17T09:05:47+03:00

Answer and Explanation:

The Preparation of financial statement, Income statement, Balance sheet and Cash flow statement are explained with the help of spreadsheet. Kindly find the attachment which is below:-

According to the situation, Prentise agree to keep the damaged goods as Prentise can resell the damaged goods or can get goods at a lower cost.