cts negative, use the minus sign. Remember: if a contra account is Purchases and Sales of Merchandise, Cash Flow Pedal City, a bike shop, opened for business on April 1. uses a periodic inventory system. The following transactions occurred during the first month of business Required: For all accounting equations, if a financial statement item is not affected, select "No Entry and leave the amount box blank or entert ncreased, it will have the effect of decreasing the corresponding financial statement item. 1. Identify and analyze each of the following transactions of Pedal City April 1: Purchased five units from Giorgio, Inc. for $500 total, with terms 3/10, n/30, FOB destination. Activity Accounts Statement(s) How does this entry affect the accounting equation Assets April 10: Paid for the April 1 purchase. Activity Accounts Balance Sheet Stockholders Liabilities Equity Revenues Income Statement Expenses