I need assistance with completing this assignment.
Word has gotten around that you know accounting and can explain it well. Jim, another of your friends has a unique business. During the summer he buys hats that cost $5.00 each and sells them at the beach for $12.00 each. Other than the cost of the hat, his only other expense last summer was $120 for parking. He sold 78 hats last summer. His accountant prepared a financial statement for him and he has several questions about the income statement. He asks: · What does the cost of goods sold and gross profit mean? · Why does the income statement indicate gross profit? Is that info I need to pay attention to? · What is the difference between gross profit and net income? On January 1, Year 1, Jana started a small flower merchandising business that she named Jana’s Flowers. The company experienced the following events during the first year of operation: 1. Started the business by issuing common stock for $30,000 cash. 2. Paid $19,000 cash to purchase inventory. 3. Sold merchandise that cost $10,000 for $21,000 on the account. 4. Collected $16,000 cash from accounts receivable. 5. Paid $3,750 for operating expenses. Required · a. Organize ledger accounts under an accounting equation and record the events in the accounts. In the last column of the table, provide appropriate account titles for the Retained Earnings amounts. · b-1. Prepare an income statement. · b-2. Prepare a balance sheet. · b-3. Prepare a statement of cash flows. · c. Since Jana sold inventory for $21,000, she will be able to recover more than half of the $30,000 she invested in the stock. Do you agree with this statement? The following information is available for two different types of businesses for the Year 1 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college students. Data for Hopkins CPAs 1. Borrowed $90,000 from the bank to start the business. 2. Provided $60,000 of services to clients and collected $50,000 cash. 3. Paid salary expense of $32,000. Data for Sports Clothing 1. Borrowed $90,000 from the bank to start the business. 2. Purchased $60,000 inventory for cash. 3. Inventory costing $26,000 was sold for $50,000 cash. 4. Paid $8,000 cash for operating expenses. Required 1. Prepare an income statement, balance sheet, and statement of cash flows for each of the companies. Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $30,000 cash from the issue of common stock. 2. Purchased inventory for $15,000 cash. 3. Sold inventory costing $9,000 for $20,000 cash. 4. Paid $1,500 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, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) Ho Designs experienced the following events during Year 1, its first year of operation: 1. Started the business when it acquired $70,000 cash from the issue of common stock. 2. Paid $41,000 cash to purchase inventory. 3. Sold inventory costing $37,500 for $56,200 cash. 4. Physically counted inventory showing $3,200 inventory was on hand at the end of the accounting period. Required 1. Determine the amount of the difference between book balance and the actual amount of inventory as determined by the physical count.