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. Seller: Assets = Liabilities + Stockholders' Equity Capital Stock Retained Earnings Cash Accounts Payable Accounts Receivable 490 Merchandise Inventory -300 190 50 140 Statement of Cash Flows Income Statement No Effect $ 0 Sales Cost of Goods Sold 490 300 50 Delivery Expenses Effect on Net income 140 Buyer : Assets = Liabilities + Stockholders' Equity Cash Accounts Receivable Merchandise Inventory Accounts Payable Capital Stock Retained Earnings Buyer : Assets = Liabilities + Stockholders' Equity Cash Accounts Receivable Retained Earnings Merchandise Inventory 490 Accounts Payable Capital Stock 490 Income Statement Statement of Cash Flows No Effect No Effect 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. Seller: Assets = Liabilities + Stockholders' Equity Accounts Payable Capital Stock Retained Earnings Merchandise Inventory 60 40 x Cash Accounts Receivable 400 x Statement of Cash Flows No Effect $ 0 Income Statement Sales Ret and Allow $ $ 500 x 60 Cost of Merchandise Sold Net Income $ 40 x Buver. Buyer : Assets = Liabilities + Stockholders' Equity Retained Earnings Cash Accounts Receivable Merchandise Inventory Accounts Payable Capital Stock 60 60 x Statement of Cash Flows Income Statement No Effect V $ 0 No Effect 0 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. Seller: Assets = Liabilities + Stockholders' Equity Cash Accounts Receivable Merchandise Inventory Accounts Payable Capital Stock Retained Earnings -392 Statement of Cash Flows Income Statement Operating $ 392 No Effect Buyer : Assets = Liabilities + Stockholders' Equity Cash Accounts Receivable Merchandise Inventory Capital Stock Retained Earnings Accounts Payable -392 Buyer : Assets = Liabilities + Stockholders' Equity Cash Accounts Receivable Merchandise Inventory Accounts Payable Capital Stock Retained Earnings -392 Income Statement Statement of Cash Flows $ -392 Operating No Effect