A Merchandiser, Following the Perpetual Inventory System, Has the Following

question 157

Essay

A merchandiser, following the perpetual inventory system, has the following transactions during August, 2015:
$$\begin{array} { l l l } \text { Date } & \text { Trenstetion } & \text { Amount (\$) } \\\hline \text { Aug. 5 } & \text { Purchases on account } & 300,000 \\\text { Aug. } 9 & \text { Paid for transportation of goods purchased } & 25,000 \\\text { Aug.10 } & \text { Purchase returned } & 20,000 \\\text { Aug.15 } & \text { Paid for goods purchased on August 5 } & ?\end{array}$$ Credit terms of invoice are 2/15, n/45. Give journal entries for the above transactions.

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Definitions:

Returns

The gains or losses made from an investment over a particular period, often expressed as a percentage of the investment's initial cost.

Interest Rate

The percentage of an amount of money charged by lenders to borrowers for the use of money, usually expressed as an annual percentage.

Bonds

Fixed-income securities issued by corporations, municipalities, or governments to finance projects or operations, representing a loan made by an investor to the issuer.

Lenders

Individuals or institutions that provide funds to borrowers under the expectation of being repaid with interest.