At the beginning of 2012, the Jeater Co. had the following balance in its accounts: Cash $4,300, Inventory $9,000, Common Stock $10,000 and Retained Earnings $3,300
During 2012, the co. experienced the following:
1 Purchased inventory that cost $2,200 on account from Blue Co. under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $110 were paid in cash.
2 Returned $200 of the inventory that it had purchased because the inventory was damaged in transit. The freight co. agreed to pay the return freight cost.
3 Paid the amount due on its account payable to lue Co. within the discount period.
4 Sold inventory that had cost $3,000 for $5,500 on account, under terms 2/10, n/45.
5 Recieved merchandise returned from customer. The merchandise originally cost $400 and was sold to the customer for $710 cash during the previous accounting period. The customer was paid $710 cash for the returned merchandise.
6 Delivered goods FOB destination in Event 4. Freight costs of $60 were paid in cash.
7 Collected the amount due on the account recievable within the discounted period.
8 Took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.