50.1K

Verified Solution

Link Copied!

Part 2: Accounting for Inventory Transactions Review each transaction for Premier Pools, a corporation that sells Premier Pools to consumers. Determine which accounts are impacted in the accounting records and how the transaction impacts the financial statements. The first transaction has been completed for you as an example. 1. Premier Pools issued $85,000 of common stock to shareholders. Stmt. of Cash Flows Income Statement = + Balance Sheet Assets Liabilities Acct. Acct. Unearned + Receiv. + Inventory + Equip. Pay. + Rev. Net Stockholders' Equity Common Retained Stock Earnings 85,000 Cash Revenue Expenses Income Cash Flow 85,000 85,000 FA 2. Premier Pools purchased pools from a supplier on account. The purchase totaled $60,000. Stmt. of Cash Flows Balance Sheet Income Statement Assets Liabilities Acct. Unearned Pay. Rev. Acct. + Receiv. Stockholders' Equity Common Retained Stock + Earnings Net Cash Inventory Equip. = Revenue Expenses Income Cash Flow 3. Premier Pools sold a pool to the Smith family for $8,000 cash. The pool cost Premier Pools $4,000. Stmt. of Cash Flows Income Statement Assets Balance Sheet Liabilities Acct. Unearned Equip. Pay. + Rev. Stockholders' Equity Common Retained Stock Earnings Acct. + Receiv. + Inventory Net Cash + Revenue Expenses Income Cash Flow 4. Premier Pools issued payment to the supplier for pools purchased in #2 above. Stmt. of Cash Flows Balance Sheet Income Statement Assets Acct. + Receiv. + Inventory + Equip. Liabilities Acct. Unearne Pay. + d Rev. Stockholders' Equity Common Retained Stock + Earnings Net Income Cash Revenue Expenses Cash Flow 5. Premier Pools sold pools to the Lakeside Country Club on account for $22,000. The cost of the pools sold was $12,000. Stmt. of Cash Flows Balance Sheet Income Statement Assets Acct. + Receiv. + Inventory Liabilities Acct. Unearned Pay. + Rev. Stockholders' Equity Common Retained Stock + Earnings Net Income Cash Equip. Revenue -Expenses Cash Flow 6. Premier Pools paid $350 for an advertisement that ran in this week's newspaper. Stmt. of Cash Flows Balance Sheet Income Statement Assets Acct. + Receiv. + Inventory + Equip. Acct. Pay. Net Liabilities Unearned + Rev. Stockholders' Equity Common Retained Stock Earnings Cash + Revenue Expenses = Income Cash Flow

Answer & Explanation Solved by verified expert

See Answer