The selected transactions below were completed by Affordable Supplies Co., which sells supplies primarily to wholesalers and occasionally to retail customers.

Instructions:

Illustrate the effects of each of the transactions on the accounts and financial statements of Affordable Supplies Co.

If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases, cash outflows, and the income statement effects that reduce gross profit as negative amounts.

Jan. 6. Sold merchandise on account, $14,000, terms FOB shipping point, n/eom. The cost of merchandise sold was $8,400.

Balance Sheet Assets Liabilities + Stockholders' Equity Accounts Receivable + Inventory No Effect + Retained Earnings Jan. 6. Statement of Cash Flows Income Statement No effect Sales Cost of goods sold Gross profit Jan. 8. Sold merchandise on account, $20,000, terms FOB destination, 1/10, n/30. The cost of merchandise sold was $14,000. Balance Sheet Assets Liabilities + Stockholders' Equity Accounts Receivable + Inventory No Effect + Retained Earnings Jan. 8. Statement of Cash Flows Income Statement No effect Sales Cost of goods sold Gross profit Jan. 16. Sold merchandise on account, $19,500, terms FOB shipping point, n/30. The cost of merchandise sold was $11,700. Balance Sheet Assets Liabilities + Stockholders' Equity Accounts Receivable + Inventory No Effect + Retained Earnings Jan. 16. Statement of Cash Flows Income Statement No effect Sales Cost of goods sold Gross profit Jan. 18. Received check for amount due for sale on January 8. Balance Sheet Assets Liabilities + Stockholders' Equity Cash + Accounts Receivable No Effect + No Effect Jan. 18. Statement of Cash Flows Income Statement Operating No effect Jan. 19. Issued credit memorandum for $4,500 for merchandise returned from sale on January 16. The cost of the merchandise returned was $2,700. Balance Sheet Assets Liabilities + Stockholders' Equity Accounts Receivable + Inventory + Est. Returns Inventory = Cust. Refunds Payable + No Effect Jan. 19. . Statement of Cash Flows Income Statement No effect No effect Jan. 26. Received check for amount due for sale on January 16 less credit memorandum of January 19. Balance Sheet Assets Liabilities + Stockholders' Equity Cash + Accounts Receivable No Effect + No Effect Jan. 26. Statement of Cash Flows Income Statement Operating No effect Jan. 31. Paid Cashell Delivery Service $3,000 for merchandise delivered during January to customers under shipping terms of FOB destination. Balance Sheet Assets Liabilities + Stockholders' Equity Cash + No Effect No Effect + Retained Earnings Jan. 31. Statement of Cash Flows Income Statement Operating Delivery expense Jan. 31. Received check for amount due for sale of January 6. Balance Sheet Assets Liabilities + Stockholders' Equity Cash + Accounts Receivable No Effect + No Effect Jan. 31. Statement of Cash Flows Income Statement Operating No effect