Dan Watson started a small merchandising business in Year 1. The business experienced the fllowing...
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Dan Watson started a small merchandising business in Year The business experienced the fllowing events during its first year of operation. Assume that Watson uses the perpetual inventory system. Acquired $ cash from the issue of common stock. Purchased inventory for $ cash. Sold inventory costing $ for $ cash. Required a Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities OA investing activities IA or financing activities FA b Determine the amount of gross margin. c What is the amount of total assets at the end of the period? 
Dan Watson started a small merchandising business in Year The business experienced the fllowing
events during its first year of operation. Assume that Watson uses the perpetual inventory system.
Acquired $ cash from the issue of common stock.
Purchased inventory for $ cash.
Sold inventory costing $ for $ cash.
Required
a Use a horizontal financial statements model to show how each event affects the balance sheet, income
statement, and statement of cash flows. More specifically, record the amounts of the events into the
model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities OA
investing activities IA or financing activities FA
b Determine the amount of gross margin.
c What is the amount of total assets at the end of the period?
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