Data for Norlan Inc. are presented in P5-3A.

Sept. 2 Purchased equipment on account for $25,000, terms n/30, FOB destination.

3 Freight charges of $625 were paid by the appropriate party on the September 2 purchase of equipment.

4 Purchased merchandise on account from Hillary Corp. at a cost of $65,000, terms 1/15, n/30, FOB shipping point.

5 Purchased supplies for $4,000 cash.

7 Freight charges of $1,600 were paid by the appropriate party on the September 4 purchase of merchandise.

8 Returned damaged goods costing $5,000 that were originally purchased from Hillary on September 4. Received a credit on account.

9 Sold merchandise costing $15,000 to Fischer Limited for $20,000 on account, terms 2/10, n/30, FOB destination.

10 Freight charges of $375 were paid by the appropriate party on the September 9 sale of merchandise.

17 Received the balance due from Fischer.

18 Paid Hillary the balance due.

20 Purchased merchandise for $6,000 cash.

22 Sold inventory costing $20,000 to Kun-Tai Inc. for $27,000 on account, terms n/30, FOB shipping point.

23 Freight charges of $500 were paid by the appropriate party on the September 22 sale of merchandise.

28 Kun-Tai returned merchandise sold for $10,000 that cost $7,500. The merchandise was restored to inventory.

Instructions

(a) Record the September transactions on Norlan's books, assuming it uses a periodic inventory system instead of a perpetual inventory system.

(b) Assume that Norlan did not take advantage of the 1% purchase discount offered by Hillary Corp. and paid Hillary on

Oct. 3 instead of September 18. Record the entry that Norlan would make on Oct. 3 and determine the cost of missing this purchase discount to Norlan.