Impact on income Increase (decrease) to income July 1) Purchased merchandise from Mannion Company for $9,800 under credit terms of 1/15, n/30, FOB shipping point, Decreases net income invoice dated July 1. July 2) Sold merchandise to Gonzalez Co. for $2,800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2 000: Increases net income July 2) The cost of the merchandise sold to Gonzalez Co. was $1,680 July 3) Paid $885 cash for freight charges on the purchase of July 1 000: No impact on income 000: Decreases net income July 8) Sold merchandise for $5,500 cash. July 8) The cost of the merchandise sold was $3.300 July 9) Purchased merchandise from Knight Co. for $4,100 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11) Returned $800 of merchandise purchased on July 9 from Knight Co., and debited its account payable for that amount. July 12) Received the balance due from Gonzalez Co for the invoice dated July 2, net of the discount July 16) Paid the balance due to Mannion Company within the discount period July 19) Sold merchandise to Lane Co for $5,000 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19 July 19) The cost of the merchandise sold to Lane Co. was $3,500 July 21) Gave a price reduction (allowance) of $1.000 to Lane Co for merchandise sold on July 19, and credited Lane's accounts receivable for that amount July 24) Paid Knight Co. the balance due, net of discount July 30) Received the balance due from Lane Co. for the invoice dated July 19, net of discount. July 31) Sold merchandise to Gonzalez Co. for $10,800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. July 31) The cost of the merchandise sold to Gonzalez Co was $6,500