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

question 96

Essay

A merchandiser, following the perpetual inventory system, has the following transactions during August, 2019:
$$\begin{array} { l l l } \text { Date } & \text { Trancection } & \text { Amount } \\\hline \text { Aug. 5 } & \text { Purchased inventory on account } & \$ 300,000 \\\text { Aug. 9 } & \text { Paid for transportation of goods purchased } & 25,000 \\\text { Aug. 10 } & \text { Returned defective merchandise to the seller } & 20,000 \\\text { Aug. 15 } & \text { Paid for goods purchased on August 5 } & \text { ? }\end{array}$$ Credit terms of invoice are 2/15, n/45. Prepare journal entries for the above transactions. Omit explanations.

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Definitions:

Selling

The process of offering goods or services to potential customers in exchange for money or other forms of payment.

Coupon Rate

The annual interest yield on a bond, displayed as a percentage of its principal value.

Tax Rate

The scale at which the government levies taxes on the financial gains of individuals or corporations.