al inventory system.
1) The company purchased $12,500 of merchandise on account under terms 3/10, n/30.
2) The company returned $2000 of merchandise to the supplier before payment was made.
3) The liability was paid within the discount period.
4) All of the merchandise purchased was sold for $19,000 cash.
What effect will the return of merchandise to the supplier in event (2) have on Darlington's financial statements?
a. Assets and stockholders' equity decrease by $2000.
b. None.
c. It is an asset exchange transaction.
d. Assets and liabilities decrease by $1940.
e. Assets and liabilities decrease by $2000.