Assume the perpetual inventory method is used. The company purchased $13,400 of merchandise on account under terms 4/10, n/30. The company returned $2,900 of merchandise to the supplier before payment was made. The liability was paid within the discount period. All of the merchandise purchased was sold for $20,800 cash. What effect will the return of merchandise to the supplier have on the accounting equation? Assume the perpetual inventory method is used. 1) The company purchased $13,600 of merchandise on account under terms 2/10, n/30. 2) The company returned $3,100 of merchandise to the supplier before payment was made. 3) The liability was paid within the discount period. 4) All of the merchandise purchased was sold for $21,200 cash. The amount of gross margin from the four transactions is: Galaxy Company sold merchandise costing $3,300 for $5,600 cash. The merchandise was later returned by the customer for a refund. If the perpetual inventory method is used, what effect will the sales return have on the accounting equation? How does the purchase of inventory on account under the perpetual inventory method affect the financial statements? Sanchez Company engaged in the following transactions during Year 1: Started the business by issuing $12,100 of common stock for cash. The company paid cash to purchase $7,400 of inventory. The company sold inventory that cost $4,800 for $9,650 cash. Operating expenses incurred and paid during the year, $4,300. Sanchez Company engaged in the following transactions during Year 2: The company paid cash to purchase $10,400 of inventory. The company sold inventory that cost $9,000 for $16,250 cash. Operating expenses incurred and paid during the year, $5,300. Sanchez uses the perpetual inventory system. What is Sanchez's gross margin for the Year 2? Ballard Company uses the perpetual inventory system. The company purchased $9,000 of merchandise from Andes Company under the terms 2/10, net/30. Ballard paid for the merchandise within 10 days and also paid $350 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $17.000 cash. What is the gross margin that resulted from these transactions? Net sales is calculated by subtracting cost of goods sold from sales revenue. True or False True False