Some of the transactions of Torres Company during August are listed below. Torres uses the periodic inventory method.

August 10		Purchased merchandise on account, $12,000, terms 2/10, n/30.
13		Returned part of the purchase of August 10, $1,200, and received credit on account.
15		Purchased merchandise on account, $16,000, terms 1/10, n/60.
25		Purchased merchandise on account, $20,000, terms 2/10, n/30.
28		Paid invoice of August 15 in full.

Part 1) Assuming that purchases are recorded at gross amounts and that discounts are to be recorded when taken: Describe how the various items would be shown in the financial statements.

Part 2) Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses: Describe how the various items would be shown in the financial statements.

Part 3) Which of the two methods do you prefer and why? (Your opinion is fine, I am indifferent)

Please go in detail! I have no idea how to begin my sentences..