Response to the following questions:
1. A retailer is considering the purchase of 100 units of a specific item from either of two suppliers. Their offers are as follows:
A: $400 a unit, total of $40,000, 2/10, n/30, plus transportation costs of $625.
B: $403 a unit, total of $40,300, 1/10, n/30, no charge for transportation. Which of the two offers, A or B, yields the lower price?
2. What is the normal balance of the following accounts:
(a) Cost of Merchandise Sold, (b) Merchandise Inventory, (c) Sales, (d) Sales Discounts, (e) Sales Returns and Allowances, (f) Transportation Out?