The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $60,000 cash from the issue of common stock.
2. Purchased $65,000 of inventory on account.
3. Received goods purchased in Event 2 FOB shipping point; transportation cost of $900 paid in cash.
4. Sold inventory on account that cost $38,000 for $71,000.
5. Transportation cost on the goods sold in Event 4 was $620.
6. The goods were shipped FOB destination.
7. Cash was paid for the transportation cost.
8. Customer in Event 4 returned $4,200 worth of goods that had a cost of $2,150.
9. Collected $58,300 cash from accounts receivable.
10. Paid $59,200 cash on accounts payable.
11. Paid $2,600 for advertising expense.
12. Paid $3,100 cash for insurance expense.
Required:
a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction
b. Record the above events in a horizontal statement model.