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Milo Clothing experienced the following events during 2018, its first year of operation: ...

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Accounting

Milo Clothing experienced the following events during 2018, its first year of operation:

Acquired $16,000 cash from the issue of common stock.

Purchased inventory for $7,000 cash.

Sold inventory costing $4,200 for $7,140 cash.

Paid $950 for advertising expense.

Required

Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash 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.)
MILO CLOTHING
Effect of Events on the Financial Statements
Event Assets = Stockholders Equity Revenue Expenses = Net Income Statement of Cash Flows
Cash + Inventory = Common Stock + Retained Earnings
1. + = + =
2. + = + =
3a. + = + =
3b. + = + =
4. + = + =
Total 0 + 0 = 0 + 0 0 0 = 0 0

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