8 Purple Beverages Inc. sells only one product, the very popular and strong Purple Rain drink. The drinks are sold to local fraternity and sorority clubs. Purple Beverages Inc. had the following balances at January 1, 2018: (1000 units of purple rain drink x $4 per unit) Cash Inventory Accounts receivable debit Allowance for doubtful accounts Contributed capital credit Retained earnings 8,000 debit 4,000 debit 10,000 1,000 credit $15,000 6,000 credit Other information: 1. Purple Beverages Inc. uses the perpetual method to account for its inventory and values its inventory using the First-in First-Out basis. 2. Purple Beverages Inc. uses the aging method to determine its allowance for doubtful accounts using the following rates: Accounts not yet due Accounts 1-60 days overdue 1% 10% Accounts over 60 days overdue 20% 3. Trade terms are 2/10, net 30 on sales. No discount is available for early payment to suppliers. The following were the only transactions that occurred during the first quarter of 2018: