Exercise 4-15B Purchase returns, discounts, loss, and a multistep income statement The following information was drawn from the Year 1 accounting records of Cozart Merchandisers. 1. Inventory with a list price of $40,000 was purchased under terms 2/10, net/30. 2. Cozart returned $4,200 of the inventory to the supplier five days after purchase. 3. The accounts payable was settled within the discount period. 4. The inventory was sold for $69,000. 5. Selling and administrative expenses amounted to $12,000. 6. Interest expense paid amounted to $800. 7. Land that cost $15,000 was sold for $20,000 cash. Required a. Determine the cost of the inventory sold. b. Prepare a multistep income statement. c. Where would the interest expense be shown on the statement of cash flows? d. How would the sale of the land be shown on the statement of cash flows? e. Explain the difference between a loss and an expense. EXERCISE 4-15B a. Cozart Merchandisers Cost of inventory purchase Minus: Minus: Total cost of the inventory sold $40,000 b. Cozart Merchandisers Income Statement For the Year Ended December 31, Year 1 Net Sales Gross Expenses: $69,000 Operating Income Net Income expense on sale of land c. The interest expense would be reported in the activities section of the statement of cash flows. d. The price $ from the sale would be shown as a cash (inflow/outflow) from activities on the statement of cash flows. e. A loss occurs from activities that are: Expenses are sacrifices that are incurred to: