Based on the information below, illustrate the effects on the accounts and financial statements (Balance Sheet and Income Statement) of the seller and buyer:

1. Seller sells Buyer on account merchandise costing $300 for $500, terms 2/10, net 30, FOB destination. The transportation charge is $50.

2.Buyer returns as defective $100 worth of the $500 merchandise received. The sellers cost of this merchandise is $60.

3.Buyer pays within the discount period.