The trial balance for The Bolt Co. as of January 1, 2016, was as follows: The following events affected the company during the 2016 accounting period: 1. Purchased merchandise on account that cost $8,200. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $600 cash. 3. Returned $800 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $400 allowance. 5. Sold merchandise that cost $5,500 for $9,500 cash. 6. Delivered merchandise to customers under terms FOB destination with freight costs amounting to $300 cash. 7. Paid $5,000 on the merchandise purchased in Event 1. Required a. Record the transactions in general journal format. b. Open general ledger T-accounts with the appropriate beginning balances, and post the journal entries to the T-accounts. c. Prepare an income statement and statement of cash flows for 2016. d. Explain why a difference does or does not exist between net income and net cash flow from operating activities.
The trial balance for The Bolt Co. as of January 1, 2016, was as follows: The following events…
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