Question

On April 6, 2016, Home Furnishings purchased $39,000 of merchandise from Una Imports, terms 1/10 n/45....

On April 6, 2016, Home Furnishings purchased $39,000 of merchandise from Una Imports, terms 1/10 n/45. On April 8, Home returned $8,200 of the merchandise to Una Imports for credit. Home paid cash for the merchandise on April 15, 2016. b. Record the events in a horizontal statements model like the following one. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity 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.) c. How much must Home pay for the merchandise purchased if the payment is not made until April 20, 2016?

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Answer #1

b. Records are recorded in a horizontal statements model as shown below:

Balance Sheet
Assets = Liabilities + Stockholders Equity Net Income Cash Flow
Cash + Inventory Accconts payable Common Stock + Retained earnings Revenue - Expenses
Apr-06 39,000 39,000 OA
Apr-08 -8,200 -8,200 OA
Apr-15 30,492 -308 30,800 OA

c.  Home pay for the merchandise purchased if the payment is not made until April 20, 2016 will be $30,800

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