will rate

Steritech Co., a furniture wholesaler, sells merchandise to Butler Co. on account, $86,000, terms 2/10, n/30. The cost of the merchandise sold is $51,600. Steritech Co. issues a credit memorandum for $5,000 ($4,900 net of the 2% discount) for merchandise that was damaged in shipment. Butler Co. agreed to keep the damaged merchandiise. Illustrate the effects on the accounts and financial statements of Butler Co. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. a. The purchase. Balance Sheet Assets Liabilities + Stockholders' Equity No Effect + Inventory = Accounts Payable + No Effect Statement of Cash Flows Income Statement No effect No effect b. The credit for damaged merchandise. Balance Sheet Assets Liabilities + Stockholders' Equity No Effect + Inventory - Accounts Payable + No Effect X c. The payment of the invoice within the discount period. Balance Sheet Assets Liabilities + Stockholders' Equity Cash + No Effect + Accounts Payable No Effect Statement of Cash Flows Income Statement Operating X No effect