Purchases and Sales of Merchandise, Cash Flows Cycletime, a bike shop, opened for business on April 1. It uses a periodic inventory system. The following transactions occurred during the first month of business: Required: effect of decreasing the corresponding financial statement item. 1. Identify and analyze each of the following transactions of Cycletime. April 1: Purchased five units from Fairall Corp. for $400 total, with terms 3/10,n/30, FOB destination. How does this entry affect the accounting equation? April 18: Purchased ten units from Pummill, Inc. for $900 total, with terms 3/10,n/30, FOB destination. How does this entry affect the accounting equation? How does this entry affect the accounting equation? How does this entry affect the accounting equation? 4. Cash outflow during the first month of business is much larger than expenses as shown on the income statement due to Purchases and Sales of Merchandise, Cash Flows Cycletime, a bike shop, opened for business on April 1. It uses a periodic inventory system. The following transactions occurred during the first month of business: Required: effect of decreasing the corresponding financial statement item. 1. Identify and analyze each of the following transactions of Cycletime. April 1: Purchased five units from Fairall Corp. for $400 total, with terms 3/10,n/30, FOB destination. How does this entry affect the accounting equation? April 18: Purchased ten units from Pummill, Inc. for $900 total, with terms 3/10,n/30, FOB destination. How does this entry affect the accounting equation? How does this entry affect the accounting equation? How does this entry affect the accounting equation? 4. Cash outflow during the first month of business is much larger than expenses as shown on the income statement due to