John Tyler started a small merchandising business in 2014. The business experienced the following events during its first year of operation. Assume that Tyler uses the perpetual inventory system.
1. Acquired $20,000 cash from the issue of common stock.
2. Purchased inventory for $15,000 cash.
3. Sold inventory costing $12,000 for $28,000 cash.
Required:
a. Record the events in general journal format.
b. Post the entries to T-accounts.
c. Prepare an income statement for 2014 (use the multi step format).
d. What is the amount of net cash flow from operating activities for 2014?