Sales-Related TransactionsThe selected transactions below were completed by Affordable Supplies Co., which sells supplies primarily to wholesalers and occasionally to retail customers.Instructions:Illustrate the effects of each of the transactions on the accounts and financial statements of Affordable Supplies Co.If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases, cash outflows, and the income statement effects that reduce gross profit as negative amounts. Jan. 18. Received check for amount due for sale on January 8.Balance SheetStockholders'AssetsLiabilitiesEquityCashAccounts ReceivableJan, 18.Statement of Cash FlowsIncome StatementJan. 19. Issued credit memorandum for $4,500 for merchandise returned from sale on January 16. The cost of the merchandise returned was $2,700.Balance SheetAssetsLiabilities+ Stockholders' EquityJan. 19.Statement of Cash FlowsIncome Statement Jan. 26. Received check for amount due for sale on January 16 less credit memorandum of January 19.Balance SheetStockholders'AssetsLiabilities+EquityJan. 26.Statement of Cash FlowsIncome StatementJan. 31. Paid Cashell Delivery Service $3,000 for merchandise delivered during January to customers under shipping terms of FOB destination.Balance SheetAssetsLiabilities+Stockholders' EquityCash vNo Effect vNo Effect vRetained Earnings vJan. 31.-3,000-3,000Statement of Cash FlowsIncome StatementOperating v-3,000 V

As per the accounting equation in business, total assets should be equal to total liabilities and…

Answered: Sales-Related Transactions The…

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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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 of each of the transactions on the accounts and financial statements of Affordable Supplies Co.

If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases, cash outflows, and the income statement effects that reduce gross profit as negative amounts.

Jan. 18. Received check for amount due for sale on January 8.
Balance Sheet
Stockholders'
Assets
Liabilities
Equity
Cash
Accounts Receivable
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.
Balance Sheet
Assets
Liabilities
+ Stockholders' Equity
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.
Balance Sheet
Stockholders'
Assets
Liabilities
+
Equity
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.
Balance Sheet
Assets
Liabilities
+
Stockholders' Equity
Cash v
No Effect v
No Effect v
Retained Earnings v
Jan. 31.
-3,000
-3,000
Statement of Cash Flows
Income Statement
Operating v
-3,000 V

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