Sales-Related Transactions

The selected transactions below were completed by Affordable Supplies Co., which sells supplies primarily to wholesalers and occasionally to retail customers.

Instructions: Illustrate the effects on the accounts and financial statements of recording the following transactions of Affordable Supplies Co. If no account or activity is affected, select "No effect" from the drop down list and leave the corresponding number entry box blank. Enter account decreases, cash outflows, and the income statement effects that reduce net income as negative amounts.

Jan. 6. Sold merchandise on account, $14,000, terms FOB shipping point, n/eom. The cost of merchandise sold was $8,400.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity = No Effect + Retained Earnings Jan. 6. Jan. 6. Statement of Cash Flows Income Statement No effect Sales Cost of goods sold Net income

Jan. 8. Sold merchandise on account, $20,000, terms FOB destination, 1/10, n/30. The cost of merchandise sold was $14,000.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + = + Jan. 8. Jan. 8. Statement of Cash Flows Income Statement No effect Sales Cost of goods sold Net income

Jan. 16. Sold merchandise on account, $19,500, terms FOB shipping point, n/30. The cost of merchandise sold was $11,700.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + = + Jan. 16. Jan. 16. Statement of Cash Flows Income Statement

Jan. 18. Received check for amount due for sale on January 8.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + = + Jan. 18. Jan. 18. Statement of Cash Flows Income Statement

Jan. 19. Issued credit memorandum for $4,500 for merchandise returned from sale on January 16. The cost of the merchandise returned was $2,700.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + + = + Jan. 19. Jan. 19. Statement of Cash Flows Income Statement

Jan. 26. Received check for amount due for sale on January 16 less credit memorandum of January 19.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + = + Jan. 26. Jan. 26. Statement of Cash Flows Income Statement

Jan. 31. Paid Cashell Delivery Service $3,000 for merchandise delivered during January to customers under shipping terms of FOB destination.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + = + Jan. 31. Jan. 31. Statement of Cash Flows Income Statement

Jan. 31. Received check for amount due for sale of January 6.

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + = + Jan. 31. Statement of Cash Flows Income Statement