On January 1st, New Black Company sells merchandise on accou…
On January 1st, New Black Company sells merchandise on account for $1,800 to Diamond Company with credit terms of 2/10, n/30. The merchandise costs New Black Company $900. Diamond Company returns $600 of damaged merchandise (Cost to New Black $300) along with a check to settle the account within the discount period. To record the receipt of payment, the following tabular analysis by New Black Company will show: Assets = Liabilities + Stockholders’ Equity Retained Earnings Cash + Accounts Receivable + Inventory = Accounts Payable + Common Stock + Rev. – Exp. – Div.