White Appliances

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On August 1, purchased 75 refrigerators for $45,000 cash and also paid $1,500 transportation costs related to this purchase. On the same date, White purchased 100 dishwashers for $20,000 on credit; however, the seller paid the $1,200 freight. The credit terms for the dishwashers were 2/10, n/30. On August 3rd, White determined that 5 of the refrigerators were defective, so they were returned to the seller. White paid for the dishwashers on August 9th. On August 10th, White purchased 90 microwave ovens for $9,000 on credit with terms 1/10, n/30. The seller paid the freight. White paid for the microwave ovens on August 21st.
Refer to the information presented for . Prepare all of the company's journal entries for August assuming the use of a perpetual inventory system.

What will be an ideal response?

DateAccount and ExplanationDebitCreditAugust 1Merchandise inventory45,000   Cash 45,000  (purchased inventory for cash)       August 1Merchandise inventory1,500   Cash 1,500  (record payment of freight costs)       August 1Merchandise inventory20,000   Accounts payable 20,000  (purchased inventory on credit)       August 3Cash3,000   Merchandise inventory 3,000  (returned defective goods for cash refund)      August 9Accounts payable20,000   Cash 19,600  Merchandise inventory 400  (Paid for goods within discount period)      August 10Merchandise inventory9,000   Accounts payable 9,000  (purchased inventory on credit)       August 21Accounts payable9,000   Cash 9,000  (paid for goods--not within discount period) 

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