PULL SCREEN PRINTER VERSION 4 BACK NEXT Question 1 Ayayal Liquidation Warehouse sells goods to retail stores and extends credit terms of 1/10, 1/30. Ayayal Liquidation has a stated policy of no returns, all sales are final. The company uses a perpetual Inventory system and the contract-based approach for revenue recognition. At the July year end, the balance in the Merchandise Inventory account was $6,600. During the month of August (the first month of the new fiscal year), the following merchandising transactions occurred: Aug. 1 Purchased $5,000 of merchandise from Hoang Plastics, terms 1/30, FOB destination 2 The correct company paid $120 freight on the August 1 purchase. 4 Received a $400 credit on account from Hoang Plastics because some of its marchandise was damaged. Ayayai kept the merchandise and will mark down the selling price of the goods an additional 50% 10 Sold 54,700 of merchandise to Lazlo Department Store, terms 1/10, 1/30, FOB shipping point. The goods cost Ayayal quidation $2,538. 12 Purchased $8,000 of merchandise from Danica Company, terms 2/10, 30, FOB shipping point 14 Pald $100 freight to Arron Trucking for merchandise purchased from Danica Company on August 12 18 Sold $2,300 of merchandise to Karel Company, terms 1/10, 130, FOB destination. The merchandise cost Ayayal Liquidation $1,242. 23 Paid $75 to Arron Trucking to ship the merchandise sold on August 18. 27 Collected the amount due from Karel Company for the sale on August 18, 29 Pald Hoang Plastics the amount owing from the purchase on August 1. 30 Collected the amount due from Lazio Department Store for the sale on August 10. a) Record the transactions for the month of August for Ayayal Liquidation Warehouse (Hint: Purchase transactions are recorded the same way when using the contract-based approach as when using the earrings approach.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the