Based on the data presented in Exercise 4-13, illustrate the effects on the accounts and financial statements of Butler Co. for 

(a) The purchase, 

(b) The credit for damaged merchandise, 

(c) The payment of the invoice within the discount period.

Data from Exercise 4-13

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.