Question: 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

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.

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