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Illustrate the effects on the accounts and financial statements of the following related transactions of CT Diagnostic Company: a. Purchased $560,000 of merchandise from Schultz co. on account, terms 2/10, n/30. b. Paid the amount owed on the invoice within the discount period. c. Discovered that $40,000 of the merchandise was defective and returned items, receiving credit. d. Purchased $25,000 of merchandise from Schultz co, on account, terms n/30, e. Received a check for the balance owed from the return in (c), after deducting for the purchase in (d).
Directions: Determine the current balance of retained earnings
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