ffect of inventory transactions on journals, ledgers, and financial statements: Perpetual system LO 4-1
Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system.
Acquired $28,500 cash from the issue of common stock.
Purchased inventory for $22,800 cash.
Sold inventory costing $17,000 for $31,500 cash.
Required
Record the events in general journal format.
Post the entries to T-accounts.
Determine the amount of gross margin.
What is the amount of net cash flow from operating activities for Year 1?
