Beech company produced and sold 105,000 units of its product in may. for the level of production achieved in may, the budgeted amounts were: sales, $1,300,000; variable costs, $750,000; and fixed costs, $300,000. the following actual financial results are available for may. actual sales (105,000 units) $ 1,275,000 variable costs 712,500 fixed costs 300,000 prepare a flexible budget performance report for may.

Powell company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. during 2018, powell experienced the following events: sold merchandise costing $58,000 for $99,500 on account to prentise furniture store. delivered the goods to prentise under terms fob destination. freight costs were $900 cash. received returned goods from prentise. the goods cost powell $4,000 and were sold to prentise for $5,900. granted prentise a $3,000 allowance for damaged goods that prentise agreed to keep. collected partial payment of $81,000 cash from accounts receivable. required record the events in a statements model shown below. prepare an income statement, a balance sheet, and a statement of cash flows. why would prentise agree to keep the damaged goods?