Watt Wholesale Company purchases merchandise from a variety of manufacturers and sells the merchandise to a variety of retailers. All sales are subject to a cash discount \((2 / 10, n / 30)\). Watt uses a perpetual inventory system. The May 1 balance in Watt's Inventory account was a \(\$ 70,000\) debit. The following transactions occurred during May:

May 

2 Purchased \(\$ 5,500\) of merchandise from Ajax Manufacturing; terms are 1/10, \(n / 30\).

4 Paid \(\$ 200\) freight on the May 2 purchase.

12 Paid Ajax for the May 2 purchase.

14 Purchased \(\$ 4,000\) of merchandise from Baker Manufacturing; terms are 2/10, n/45.

16 Received a \(\$ 300\) allowance on the May 14 purchase since some of the merchandise was the wrong color. All of the merchandise is salable at regular prices.

18 Purchased \(\$ 2,500\) of merchandise from Charles Industries; terms are \(2 / 10, \mathrm{n} / 30\).

19 Sold merchandise with a list price of \(\$ 2,000\) ( \(\$ 1,200\) cost) to Daytime Industries.

22 Daytime Industries returned 40 percent of the merchandise from the May 19 sale.

26 Paid Baker Manufacturing for the May 14 purchase.

29 Paid Charles Industries for the May 18 purchase.

Required 

Prepare a schedule that shows the impact of these transactions on Watt's Inventory account. Use the following headings:

Transcribed Image Text:

Date Transaction Debit Amount Credit Amount Account Balance