The following events pertain to Link's Surf Shop for October 2012. The company uses PERPETUAL INVENTORY METHOD.

Record the following transactions in horizontal statements model.

Oct. 2 Purchased $22,000 of merchandise on account with the terms 2/10, n/30

Oct. 3 Sold merchandise that cost $10,000 for $18,000 to customers on account with the terms 1/10, n/30.

Oct. 4 Returned $2,000 of defective merchandise from the Oct. 2 purchase.

Oct.10 Paid the amount due on the merchandise purchased on Oct. 2.

Oct.12 Received cash from customers in settlement of the Oct. 3 sale.

Balance Sheet

Income Statement

Assets

=

Liab.

+

Stkholders Equity

Rev.

-

Exp.

=

Net Inc.

Date

Cash

+

A. Rec.

+

Mdse. Inv.

=

A. Pay.

+

C. Stk.

+

Ret. Ear.