Prepare an income statement statement of changes in

Question

Iupe Supply Company had the following transactions in 2013:

1. Acquired $50,000 cash from the issue of common stock. 
2. Purchased $120,000 of merchandise for cash in 2013. 
3. Sold merchandise that cost $95,000 for $180,000 during the year under the following terms:

$ 50,000.Cash sales:

115,000..Credit card sales (The credit card company charges a 3 percent service fee.)

15,000..Sales on account:

4. Collected all the amount receivable from the credit card company. 

5. Collected $11,300 of accounts receivable. 

6. Paid selling and administrative expenses of $51,500. 

7. Determined that 5 percent of the ending accounts receivable balance would be uncollectible.

Required: 

a. Show the effects of each of the transactions on the elements of the financial statements, using a horizontal statements model like the one shown here. Use + for increase, Use - for decrease, and NA for not affected. The first transaction is entered as an example.

b. Prepare general journal entries for each of the transactions, and post them to T-accounts. 

c. Prepare an income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for 2013.