Indicate the accounts affected and the amounts

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Question - Diego Company sells a wide range of goods through two retail stores operating in adjoining cities. Most purchases of goods for resale are on account. Occasionally, a short-term note payable is used to obtain cash for current use. The following transactions were selected from those occurring during 2021:

a. On January 10, 2021, purchased merchandise on credit, $38,750; the company uses a perpetual inventory system.

b. On March 1, 2021, borrowed $230,000 cash from the bank and signed an interest-bearing note payable at the end of one year, with an annual interest rate of 7 percent payable at maturity.

c. On April 5, 2021, sold merchandise on credit, $68,800; this amount included GST of $3,200 and PST of $5,000. The cost of sales represents 80 percent of the sales invoice.

Required - Indicate the accounts affected and the amounts of the financial statement effects of these transactions.

Reference no: EM133135811

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