Beginning merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized cost.

Invoice cost of merchandise purchases......$92,000

Purchase discounts received ..... $2,000

Purchase returns and allowances.....$4,500

Cost of transportation in .....4,600

1. Assume the ending inventory at August 31 is $30,000 rather than $41,000, based on a physical count taken at year-end. What is the significance of this difference? How would it affect the income statement?
2. How would you explain costs of transportation-in vs customer delivery expenses?

ice dated August 17. I FILIISe had COSE $2,400. x requested a price reduction on the August 19 sale because the merchandise Decifications. Lowe's gave a price reduction (allowance) of $500 to Tux and ci ccounts receivable for that amount. eceived Tux's cash payment for the amount due from the August 19 sale less th ce from August 22. id Aron Company the amount due from the August 1 purchase. any's adjusted trial balance on August 31, its fiscal year-end, follows. It categ nts as selling expenses: Sales Salaries Expense, Rent ExpenseSelling Space, Advertising Expense. It categorizes the remaining expenses as general and ad Debit Credit $ 41,000 130,400 $ 25,000 104,550 8,000 225,600 Merchandise inventory (ending) ...... Other (noninventory) assets Total liabilities..... K. Valley, Capital........ K. Valley, Withdrawals Sales ............... Sales discounts....... Sales returns and allowances Cost of goods sold .. Sales salaries expense........ Rent expense-Selling space.... Store supplies expense ....... Advertising expense. Office salaries expense ...... Rent expense-Office space .. Office supplies expense..... Totals..... 2,250 12,000 74,500 32,000 8,000 1,500 13,000 28,500 3,600 400 $355,150 $355,150 ndise inventory was $25,400. Supplementary records of merchandisin 31 reveal the following itemized costs. handic chaco