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Donalds Dresses (DD) experienced the following events in 2014 and uses the perpetual inventory method. For each event, show how cash, the balance sheet (A=L+E) and the income statement (R-E=NI) are affected.
1. DD purchased (on account) merchandise inventory for $54,000.
2. The freight terms for the inventory merchandise in #1 were FOB shipping point. DD paid the freight cost of $1,000 in cash.
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