State Impact on Income and Increase/Decrease to Income

Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as negative values. Upon completion, compare the amount of income with the amount reported on the income statement. Impact on Income Increase (decrease) to income No impact on income Aug. 1) Purchased merchandise from Walker Company for $11,500 under credit terms of 1/10, n/30, FOB destination. invoice dated August 1. Aug. 5) Sold merchandise to Hall Corp. for $7,200 under credit terms of 2/10, 1/60, FOB destination, invoice dated August 5. Aug. 5) The merchandise sold to Hall had cost $4,300. Increases net income $ 7,200 Decreases net income 4,300 Aug. 8) Purchased merchandise from Taylor Corporation for $6.200 under credit terms of 1/10, n/45, FOB shipping point, No impact on income invoice dated August 8. (925) Aug. 9) Paid $925 cash for shipping charges related to the Decreases net income August 5 sale to Hall Corp. Aug. 10) Hall returned merchandise from the August 5 sale that had sold for $600. Aug. 10) The cost of the merchandise returned by Mitchell's was $300. The merchandise was restored to inventory Aug. 12) After negotiations with Taylor Corporation concerning problems with the purchases on August 8, Mitchell's received a credit memorandum from Taylor granting a price reduction of $900 off the $6.200 of goods purchased. Aug. 14) At Walker's request, Mitchell's paid $700 cash for freight charges on the August 1 purchase, reducing the amount owed to Walker. Aug. 15) Received balance due from Hall Corp. for the August 5 sale less the return on August 10. Aug. 18) Paid the amount due Taylor Corporation for the August 8 purchase less the price allowance from August 12. Aug. 19) Sold merchandise to Wilson Co. for $4,200 under credit terms of n/10, FOB shipping point, invoice dated August 19 Aug. 19) The cost of the merchandise sold merchandise to Wilson was $2,100. Aug. 22) Wilson requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Mitchell's sent Wilson a $500 credit memorandum toward the $4,200 invoice to resolve the issue. Aug 29) Received Wilson's cash payment for the amount due from the August 19 sale less the price allowance from August 22. Aug. 30) Paid Walker Company the amount due from the August 1 purchase. Total income $ 10,575