Elenas Earrings Inc (EE) experienced the following events in 2020 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. (present in example format below) (show in equation form with clearly labeled and properly labeled) Be sure the equation balances.

1. EE issued $70,000 of common stock.

2. EE purchased merchandise inventory on account for $110,000

3. The freight terms for the inventory merchandise in #1 were FOB shipping point. EE paid the freight cost of $300 in cash.

4. An inspection revealed that some of the inventory purchased in #1 was defective, and that had a cost of $8,000. EE returned this merchandise to the supplier.

5. EE sold 120 Earrings at a sales price of $250 each ON ACCOUNT to customers. EE had purchased the merchandise inventory sold for $12,000 (#1). HINT: it is now that the merchandise inventory becomes an expense.

6. EE customers returned some merchandise EE had sold them in #5. The merchandise had been sold for the $4,000 and had been purchased by EE for $1,500.

7. EE paid (in cash) freight cost of $3,000 for goods delivered to customers in #5, FOB destination.

Rev. Exp. = Net Inc. Cash Flow No. Beg. Bal. - -0- Assets = Liab. + Equity Cash + Inven: = Liab. + C. Stk. + Ret. Ear. -0-+ 0- -0- + -0-+ -0- + 0 -0- + + -0- -0- + -0-+ -0- + -0- -0- + -0-+ -0-+ -0- + -0-+ + -0- -0- + + -- + + -0- -0- -0- -0-= -0-= -0- -0-= -0- -0- -0- + = = | 11 -0- -0- Totals + II =