Danas Dresses (DD) experienced the following events in 2014 and uses the perpetual inventory method. For each event, show if and how cash, the balance sheet (A=L+E) and the income statement (R-E=NI) are affected, using specific dollar amounts and accounts.

1. DD purchased (on account) merchandise inventory for $54,000.

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2. The freight terms for the inventory merchandise in #1 were FOB shipping point. DD paid the freight cost of $1,000 in cash.

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3. An inspection revealed that some of merchandise inventory purchased in #1 was defective, and that had cost $4,000. DD returned this merchandise to its supplier.

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4. DD sold merchandise inventory for cash to customers for $45,000. DD had purchased the merchandise inventory sold for $30,000 (#1). HINT it is now the merchandise inventory becomes an expense.

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5. DD customers returned some merchandise DD had sold them in #4. The merchandise had been sold for $6,000, and had been purchased by DD for $4,000.

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6. DD paid (in cash) freight cost of $2,000 for goods delivered to customers in #4 FOB destination.

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BONUS How would the transaction differ if the sale in #4 was made on account?.