Assume Anderson’s General Store bought, on credit, a truckload of merchandise fr

Question

Assume Anderson’s General Store bought, on credit, a truckload of merchandise from American Wholesaling costing $29,000. If the company was charged $710 in transportation cost by National Trucking, immediately returned goods to American Wholesaling costing $1,800, and then took advantage of American Wholesaling’s 3/10, n/30 purchase discount.

Prepare journal entries to record the inventory transactions, assuming Anderson’s uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Prepare journal entries to record the inventory transactions, assuming Anderson’s uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

Anderson's Genera Store Assuming Gross Method used Journal Entries Account Title Dr $ Cr $ Merchandise Inventory                     29,000 Accounts Payable                   29,000 (purchase of merchandise) Merchandise Inventory                           710 Accounts Payable                         710 (recording transport in ) Merchandise Inventory                        1,800 Accounts Payable                     1,800 ( Goods returned) Accounts Payable                   27,200 Cash                     26,384 Merchandise Inventory                           816 ( cash discount taken and credited to inventory)

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