Effects of Transactions on the Inventory Account-Perpetual System

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 $170 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 $3,500 of merchandise from Charles Industries; terms are 2/10, n/30.
	19	Sold merchandise with a list price of $3,000 ($2,200 cost) to Daytime Industries.
	22	Daytime Industries returned 30 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 Watts Inventory account. Use the following headings:

Date		Transaction	Debit Amount		Credit Amount		Account Balance
May	1	Balance	Answer		Answer		Answer
	2	Purchase - Ajax	Answer		Answer		Answer
	4	Freight - Ajax	Answer		Answer		Answer
	12	Payment - Ajax	Answer		Answer		Answer
	14	Purchase - Baker	Answer		Answer		Answer
	16	Purchase allowance - Baker	Answer		Answer		Answer
	18	Purchase - Charles	Answer		Answer		Answer
	19	Sale - Daytime	Answer		Answer		Answer
	22	Sales return - Daytime	Answer		Answer		Answer
	26	Payment - Baker	Answer		Answer		Answer
	29	Payment - Charles	Answer		Answer		Answer