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Amarillo Company experienced the following events during its first accounting period. ( 1 ) Purchased $ 5 , 0 0 0 of inventory on account.

Amarillo Company experienced the following events during its first accounting period.
(1) Purchased $5,000 of inventory on account.
(2) Returned $50 of the inventory purchased in Event 1.
(3) Sold the inventory for $6,000 cash.
Based on this information, show how the recognition of the return will affect the Companys financial statements.

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