Que. 1. The following information was drawn from the books of Denton Company: a. At the beginning of the period the company had cash of $4,300, inventory of $9,000, contributed capital of $10,000 and retained earning $3,300. b. Denton Company purchased inventory on account from Duke Company under terms 1/10, n/30. The inventory cost $2,200. The merchandise was delivered under terms FOB shipping point. Freight cost that was paid in cash amounted to $1,100. c. Denton Company returned $200 of the inventory that it had purchased. Duke Company agreed to pay the return freight cost. d. Denton Company paid the amount due on its account payable to Duke Company within the cash discount period. e. Denton Company sold inventory that has cost $3,000 for $5,500. The sale was made on account under terms 2/10, n/45. f. One of Denton's customers returned merchandise to Denton Company. The merchandise originally cost $400 and was sold to the customer for $710 cash. The customer was paid $710 cash for the returned merchandise. g. Denton Company delivered goods under terms FOB destination. Freight cost that was paid in cash amounted to $60. h. Denton Company collected the amount due on the accounts receivable within the discount period. i. A physical count indicated that $7,970 of inventory was on hand at the end if the accounting period. Required: (12+2.5+4+1.5) = 20 a. Write down the journal entries for the transactions. b. Why the seller offers cash discount to the buyer? Why the buyer accepts the discount offer? Whom does it benefit more? c. Prepare an Income Statement. d. Why the amount of Net Income and the amount of Net Cash Flow from Operating Activity will differ? When they will not differ