Answer:
Puchases 27,300 debit
Accounts Payable 27,300 credit
--to record purchase of inventory--
Freight in 3,300 debit
Cash 3,300 credit
--to record the freight--
Equipment 38,300 debit
Accounts Payable 38,300 credit
--to record purchase of equipment--
account payable 3,700 debit
purchase returns and allowance 3,700 credit
--to record returned good to Crane Company--
accounts payable 23,600 debit
purchase returns and allowance 472 credit
Cash 23,128 credit
--to record payment to Crane Company--
purchase returns and allowance 4,172 debit
Inventory 26,428 debit
Freight in 3,300 credit
Purchases 27,300 credit
--record of inventory at the end of the month (assuming no other transaction is left to record) --
Explanation:
record under periodic inventory system
Thus, we use discounts and allowance accounts rather than directly adjust for inventory.
<u>purchases balance at payment date:</u>
27,300 - 3,700 = 23,600
discount of 2% over 23,600 = 472
cash disbursement: 23,600 - 472 = 23,128
Inventory valuation:
23,128 + 3,300 freight in = 26,428
