Transcribed Image Text: Purchase-Related Transactions The debits and credits from four related transactions, (1) through (4), are presented in the following I accounts. Assume that

Transcribed Image Text: Purchase-Related Transactions
The debits and credits from four related transactions, (1) through (4), are presented in the following I accounts. Assume that the freight terms were FOB shipping point and that the
credit terms were 1/10, n/30.
Cash
Accounts Payable
(2)
150
(3)
1,980
(1)
13,860
(4)
11,880
(4)
11,880
Inventory
(1)
13,860
(3)
1,980
(2)
150
a. Describe each transaction.
1.
Purchased merchandise on account net of discount.
2.
Paid freight.
3.
An allowance for return of merchandise was granted by the creditor. V
4. Paid the balance due within the discount period. V
b. Determine the invoice amount of the merchandise that was returned in (3).
1,830.2 X
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V Check My Work
Find the debit and credit(s) for each transaction and then consider the cause of each. Keep in mind that these are the records of a purchaser.

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