With the proposed tpp tariff changes on imported shoes, new balance would be by the change in prices on some of the imported shoes sold by other companies that compete with new balance's u. s.-produced shoes, and new balance would be because of the price it could now charge for the shoes it imports from tpp countries.

Assume the perpetual inventory method is used. 1) the company purchased $12,500 of merchandise on account under terms 2/10, n/30. 2) the company returned $1,200 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 $18,800 cash. what effect will the return of merchandise to the supplier have on the accounting equation?