Chapter 4, Problem 15AE

Journalizing inventory purchases, returns, and freight transactions (Learning Objectives 3 & 5) 10-15 min.

On October 15, 2018. Chandler’s Department Store purchased $3,900 of inventory on account from one of its suppliers. The terms were 2/15, n/45, FOB shipping point. On October 17, Chandler’s Department Store paid freight charges of $140 related to the delivery of the goods purchased on October 15. Upon receiving the goods. Chandler’s Department Store checked the order and found $1,100 of unsuitable merchandise, which was returned to the supplier on October 21. Then, on October 29, Chandler’s Department Store paid the invoice.

Requirement

1. Journalize all necessary transactions for Chandler’s Department Store, assuming the “net” method is used. No explanations are necessary.