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I cannot figure out what is incorrect in what I did. I don't understand what the...

Question:

I cannot figure out what is incorrect in what I did. I don't understand what the red x's are for!Exercise 3-3 Effect of inventory transactions on financial statements: Perpetual system LO 3-1 Dan Watson started a small merchandising business in 2018. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. . Acquired $30,000 cash from the issue of common stock. 2. Purchased inventory for $18,000 cash. 3. Sold inventory costing $15,000 for $32,000 cash. Required a. 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, NC for net change in cash and NA to indicate the element is not affected by the event b. Prepare an income statement for 2018 (use the multistep format) c. What is the amount of total assets at the end of the period?Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below Required A Required B Required C 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, NC for net change in cash and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) DAN WATSON MERCHANDISING Effect of Events on Fianancial Statements Assets Stockholders Equity Retained RevenueExpenses Earnin Net Income Statement of Cash Flows Event Common Stock 30,000 Cash 0,000+ 2,000+ +Inventory 0 8,000 030,000 FA 0(18,000) OA (18,000)+ 32,00032,000 За 3b Total +(15,000) 3,000 (15,000) 17,000 5,000(15,000) 15,000 - 44,000 + 30,000 + 32,000 17,000 44,000 NC

Exercise 3-3 Effect of inventory transactions on financial statements: Perpetual system LO 3-1 Dan Watson started a small merchandising business in 2018. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. . Acquired $30,000 cash from the issue of common stock. 2. Purchased inventory for $18,000 cash. 3. Sold inventory costing $15,000 for $32,000 cash. Required a. 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, NC for net change in cash and NA to indicate the element is not affected by the event b. Prepare an income statement for 2018 (use the multistep format) c. What is the amount of total assets at the end of the period?
Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below Required A Required B Required C 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, NC for net change in cash and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) DAN WATSON MERCHANDISING Effect of Events on Fianancial Statements Assets Stockholders' Equity Retained RevenueExpenses Earnin Net Income Statement of Cash Flows Event Common Stock 30,000 Cash 0,000+ 2,000+ +Inventory 0 8,000 030,000 FA 0(18,000) OA (18,000)+ 32,00032,000 За 3b Total +(15,000) 3,000 (15,000) 17,000 5,000(15,000) 15,000 - 44,000 + 30,000 + 32,000 17,000 44,000 NC

Answers

Solution A:

Dan Watson Merchandising
Horizontal Statement Model
Event Balance Sheet Income Statement Statement of Cash Flows
Assets = Stockholder's Equity Revenue - Expense = Net Income
Cash + Inventory = Common Stock + Retained Earnings
1 $30,000.00 + $0.00 = $30,000.00 + $0.00 $0.00 - $0.00 = $0.00 $30,000.00 FA
2 -$18,000.00 + $18,000.00 = $0.00 + $0.00 $0.00 - $0.00 = $0.00 -$18,000.00 OA
3a $32,000.00 + $0.00 = $0.00 + $32,000.00 $32,000.00 - $0.00 = $32,000.00 $32,000.00 OA
3b $0.00 + -$15,000.00 = $0.00 + -$15,000.00 $0.00 - $15,000.00 = -$15,000.00 $0.00 NA
Total $44,000.00 + $3,000.00 = $30,000.00 + $17,000.00 $32,000.00 - $15,000.00 = $17,000.00 $44,000.00 NC

Solution B:

Dan Watson Merchandising
Income Statement
Particulars Amount
Revenue $32,000.00
Cost of goods sold $15,000.00
Gross Profit $17,000.00
Operating expenses $0.00
Net Income $17,000.00

Solution C:
Total Assets = $44,000 + $3,000 = $47,000

.

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