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Exercise 3 - 7 A ( Algo ) Effect of purchase returns and allowances and freight costs on the financial statements: Perpetual system LO 3
Exercise A Algo Effect of purchase returns and allowances and freight costs on the financial
statements: Perpetual system LO
The following information applies to the questions displayed below.
The beginning account balances for Terry's Auto Shop as of January Year follow:
The following events affected the company during the Year accounting period:
Purchased merchandise on account that cost $
The goods in Event were purchased FOB shipping point with freight cost of $ cash.
Returned $ of damaged merchandise for credit on account.
Agreed to keep other damaged merchandise for which the company received a $ allowance.
Sold merchandise that cost $ for $ cash.
Delivered merchandise to customers in Event under terms FOB destination with freight costs amounting to $ cash.
Paid $ on the merchandise purchased in Event
C Why does a difference exist between net income and net cash flow from operating activities?
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