Darlington Company experienced the following business events during its first month of operations. The company uses the perpetual inventory system. 1.1) The company purchased $13,400 of merchandise on account under terms 3/10, n/30. 2.2) The company returned $2,100 of merchandise to the supplier before payment was made. 3.3) The liability was paid within the discount period. 4.4) All of the merchandise purchased was sold for $20,600 cash. What effect will the return of merchandise to the supplier in event (2) have on Darlington's financial statements? O Assets and liabilities decrease by $2,037. O None. It is an asset exchange transaction. O Assets and liabilities decrease by $2,100. O Assets and stockholders' equity decrease by $2,037.

Darlington Company experienced the following business events during its first month of operations. The company uses the perpetual inventory system. 1.1) The company purchased $13,400 of merchandise on account under terms 3/10, n/30. 2.2) The company returned $2,100 of merchandise to the supplier before payment was made. 3.3) The liability was paid within the discount period. 4.4) All of the merchandise purchased was sold for $20,600 cash. What effect will the return of merchandise to the supplier in event (2) have on Darlington's financial statements? O Assets and liabilities decrease by $2,037. O None. It is an asset exchange transaction. O Assets and liabilities decrease by $2,100. O Assets and stockholders' equity decrease by $2,037.

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Description: Darlington Company experienced the following business events during its first month of operations. Thecompany uses the perpetual inventory system.1.1) The company purchased $13,400 of merchandise on account under terms 3/10, n/30.2.2) The company re

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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