Required information Exercise 4-16A (Algo) Effect of sales returns and allowances and freight costs on the journal, ledger, and financial statements: Perpetual system LO 4-2, 4-4, 4-6, 4-7 [The following information applies to the questions displayed below.] Powell Company began the Year 2 accounting period with $18,700 cash, $60,300 inventory, $49,100 common stock, and $29,900 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $38,000 for $75,800 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $320 cash. 3. Received returned goods from Prentise. The goods cost Powell $1,830 and were sold to Prentise for $3,950. 4. Granted Prentise a $1,010 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $53,100 cash from accounts receivable.