Aug. 10. Purchased merchandise on account, $25,000, terms FOB shipping point, n/eom. Paid $600 cash to the freight company for delivery of the merchandise.

Statement of Cash Flows	Balance Sheet								Income Statement
	Assets			=	Liabilities	+	Stockholders' Equity
	cash	+	Inventory	=	Accounts Payable	+		Retained Earnings
Aug. 10.
Statement of Cash Flows								Income Statement
Operating								Sales returns and allowances

Aug. 13. Paid for invoice of August 3, less debit memorandum of August 9.

Statement of Cash Flows	Balance Sheet								Income Statement
	Assets			=	Liabilities	+	Stockholders' Equity
	Cash	+	Inventory	=	Accounts Payable	+		No Effect
Aug. 13.
Statement of Cash Flows								Income Statement
No effect								No effect

Aug 31. Paid for invoice of August 10.

Statement of Cash Flows	Balance Sheet								Income Statement
	Assets			=	Liabilities	+	Stockholders' Equity
	Cash	+	Inventory	=	Accounts Payable	+		Retained Earnings
Aug. 31.
Statement of Cash Flows								Income Statement
Operating								No effect

Feedback

Aug. 3. Note that the FOB destination freight is the sellers expense.

Aug. 9. Any discounts or returns are recorded directly by the buyer who debits Accounts Payable and credits Merchandise Inventory, basically reversing what was done in recording the purchase.

Aug. 10. Under the FOB shipping point, freight is paid by the buyer.

Aug. 13. The cash paid is the difference between the invoice and the discount.

Aug. 31. The cash paid on account in this case is equal to the invoice.

Purchase-related transactions The following selected transactions were completed by Epic Co, during August of the current year: Illustrate the effects of each of the transactions on the accounts and financial statements of Epic Co. Identify each transaction by date. 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 net income as negative amounts. Aug. 3. Purchased merchandise on account for $33,400, terms FOB destination, 2/10, n/30. Balance Sheet statement of Cash Flows Assets = Liabilities Stockholders' Equity Incone Statement Accounts Receivable X + Inventory - No Effect X + Retained Earnings X Aug. 3. -33,400 X 33,400 x 668 X Statement of Cash Flows Income Statement No effect ? Sales X 33,400 x Aug. 9. Issued debit memorandum for $2,500 ($2,450 net of 2% discount) For merchandise from the August 3 purchase that was damaged in shipment. Balance sheet Statement of Cash Flows Assets = Liabilities Stockholders' Equity Income Statement Accounts Payable X + Inventory ? = No Effect X + Retained Earnings X Aug. 9. 7,000 X 7,000 x Statement of Cash Flows Income Statement Operating X Sales X un 10. Purchased merchandise an account. $25.000 terms FOR Shinning point. niem. Pald 5600 cash to the frelor company for delivery of the merchandise