Based on the information below, illustrate the effects on the accounts and financial statements of the Seller and the Buyer. Both use a perpetual inventory system. a. Seller sells Buyer on account merchandise costing $300 for $500, terms 2/10, net 30, FOB destination. The transportation charge is $50. b. Buyer returns as defective $100 worth of the $500 merchandise received. The seller's cost is $60. If a financial statements doesn't require an entry, select "No Effect" and enter "0" in amount field. c. Buyer pays within the discount period. If a financial statements doesn't require an entry, select "No Effect" and enter "0" in amount field.

Accounts Receivables 500

Sales Revenues 500

--to record sale--

COGS 300

Inventory 300

--to record COGS of the previous sale--

freight-out 50 debit

cash 50 credit

--to record for freights on sale--

Sales Returns 100

Accounts Receivables 100

--to record returned goods--

Inventory 60 debit

COGS 60 credit

--to reord for recepcion of received good from customer--

Cash 392

Inventory 8

Accounts Receivables 400

--to record collection within discount--

Explanation:

As the good are in good state as they are valued at $60 we re-enter them in the accounting.

Then, we solve for the outstanding balance of the sale:

500 - 100 return = 400

Then, we solve for the discount 400 x 2% = 8

Next, we get the amounr received: 400 - 8 = 492