RECORDING PURCHASES Compass Inc., purchased 1,000 bags of insulation from Glassco, Inc. The bags of insulation cost $4.25 each. Compass paid Turner Trucking $260 to have all 1,000 bags of insulation shipped to its warehouse. Compass returned 50 bags that were defective and paid for the remainder. Assume that Compass uses the perpetual inventory system and that Glassco, Inc. did not offer a purchase discount.

Required:

. Prepare a journal entry to record the purchase of the 1,000 bags of insulation.

. Prepare the entry to record the payment for shipping.

. Prepare the entry for the return of the 50 defective bags.

. Prepare the entry to record the payment for the 950 bags kept by Compass.

. What is the total cost of this purchase?

Exercise