a) The following are merchandising transactions of Stone Company, which applies to the periodic inventory system. August 1 Purchased merchandise from Abilene Company for RO. 6,000 under credit terms of 1/10, n/30, FOB destination. August 4 At Abilene's request, Stone paid RO. 100 cash for freight charges on the August 1 purchase, reducing the amount owed to Abilene. August 5 Sold merchandise to Lux Corp. for RO.4,200 under credit terms of 2/10,n/60, FOB destination. The merchandise had cost RO. 3,000. August 8 Purchased merchandise from Welch Corporation for RO. 5,300 under credit terms of 1/10, n/45, FOB shipping point. The invoice showed that at Stone's request, Welch paid the RO. 240 shipping charges and added that amount to the bill. (Hint: Discounts are not applied to freight and shipping charges). August 9 Paid RO. 120 cash for shipping charges related to the August 5 sale to Lux Corp. August 10 Lux returned merchandise from the August 5 sale that had cost Stone RO. 500 and been sold for RO. 700. The merchandise was restored to inventory. August 12 After negotiations with Welch Corporation concerning problems with the merchandise purchased on August 8, Stone received a credit memorandum from Welch granting a price reduction of RO. 800. August 15 Received balance due from Lux Corp. for the August 5 sale. August 18 Paid the amount due Welch Corporation for the August 8 purchase. August 15 Received balance due from Lux Corp. for the August 5 sale. August 18 Paid the amount due Welch Corporation for the August 8 purchase. August 19 Sold merchandise to Rax Co. for RO. 3,600 under credit terms of 1/10,n/30, FOB shipping point. The merchandise had cost RO. 2,500. August 22 Rax requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Stone sent Rax a RO. 600 credit memorandum to resolve the issue. August 29 Received Rax's cash payment for the amount due from the August 19 sale. August 30 Paid Abilene Company the amount due from the August 1 purchase. Page 6 of 8 Instructions: a) Prepare the subsidiary ledger, receivables ledger only. (3 Marks) b) Prepare the general ledger (account payable control account is not required. (4 Marks) c) Does the sender (maker) of a debit memorandum record a debit or a credit in the recipient's account? What entry (debit or credit) does the recipient record? (to answer this part, words must be at least 100 words)