Problem 1: The following events pertain to Burlington Supply Company for January, 2012. Indicate how each of the events affects the company's financial statements, using the horizontal financial statement model.
1) Jan 3. Purchased $4,000 of merchandise inventory from supplier, Kelly Distributors, Inc. The terms of the purchase: 2/10, n/30 and FOB shipping point.
2) Jan 5. Paid $90 cash for freight to trucking company to have goods shipped from Kelly Distributors, Inc.
3) Jan 7. (a) Sold merchandise for $800 to a customer on account. (b) The merchandise sold had cost $560.
4) Jan 10. Returned $500 (list price) of defective merchandise to Kelly Distributors, Inc.
5) Jan. 11. Paid amount due to Kelly Distributors for merchandise purchased on Jan. 3.
6) Jan. 12. a) Accepted a return of $150 of the goods sold on Jan. 7. b) The cost of these goods was $110.