Poole Company began the 2013 accounting period with $36,000 cash, $80,000 inventory, $70,000 common stock, and $46,000 retained earnings. During the 2013 accounting period, Poole experienced the following events:

1. Sold merchandise costing $51,500 for $92,900 on account to Mable's General Store. 
2. Delivered the goods to Mable's under terms FOB destination. Freight costs were $500 cash. 
3. Received returned goods from Mable's. The goods cost Poole Company $3,200 and were sold to Mable's for $4,700. 
4. Granted Mable's a $1,500 allowance for damaged goods that Mable's agreed to keep. 
5. Collected partial payment of $71,000 cash from accounts receivable.

Required: 

a. Record the transactions in general journal format. 
b. Open general ledger T-accounts with the appropriate beginning balances and post the journal entries to the T-accounts. 
c. Prepare an income statement, balance sheet, and statement of cash flows. 
d. Why would Poole grant the $1,500 allowance to Mable's? Who benefits more?