Mario Company experienced the following events: 1. Purchased merchandise inventory for cash.
2. Sold merchandise inventory on account. Label the revenue recognition 2a and the expense recognition 2b.
3. Returned merchandise purchased on account.
4. Purchased merchandise inventory on account.
5. Paid cash on accounts payable within the discount period.
6. Paid cash for selling and administrative expenses.
7. Sold merchandise inventory for cash. Label the revenue recognition 7a and the expense recognition 7b.
8. Paid cash for transportation-out.
9. Paid cash for transportation-in.
10. Collected cash from accounts receivable not within the discount period.
Required
Identify each event as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also how each event affects the financial statements by selecting the + for increase, − for decrease, or NA for not affected under each of the components in the following statements model. Assume the company uses the perpetual inventory system. In the Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. The first event is recorded as an example.