GL04-01 - Based on Problem 4-1A LO P1, P2

Transaction impact on income

For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as minus sign. Upon completion, compare the gross profit with the amount reported on the partial income statement. ncrease (decrease) to income Impact on income July 1) Purchased merchandise from Walker Company for $8,600 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July1 July 2) Sold merchandise to Perry Co. for $2,200 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. July 2) The cost of the merchandise sold to Perry Co. was $1,320 July 3) Paid $645 cash for freight charges on the purchase of July 8) Sold merchandise for $4,300 cash. July 8) The cost of the merchandise sold was $2,600 July 9) Purchased merchandise from Ryan Co. for $3,500 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9 July 11) Received a $700 credit memorandum from Ryan Co. for the return of part of the merchandise purchased on July 12) Received the balance due from Perry Co. for the invoice dated July 2, net of the discount. July 16) Paid the balance due to Walker Company within the discount period. July 19) Sold merchandise to Clinton Co. for $3,800 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19 July 19) The cost of the merchandise sold to Clinton Co. was 2,700 July 21) Issued a $800 credit memorandum to Clinton Co. for an allowance on goods sold on July 19 July 24) Paid Ryan Co. the balance due, net of discount. July 30) Received the balance due from Clinton Co. for the invoice dated July 19, net of discount. July 31) Sold merchandise to Perry Co. for $9,600 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31 July 31) The cost of the merchandise sold to Perry Co. was 5,800 Total gross profit