Exercise 6-56 Recording Purchases Compass Inc. purchased 1,250 bags of insulation from Glassco Corporation on account. The bags of insulation cost $5.50 each. Compass paid Tremblay Trucking $320 to have the bags of insulation shipped to its warehouse. Comp returned 50 bags that were defective and paid for the remainder. Assume that Compass uses the periodic inventory system. Required: 1. Prepare the journal entry to record the purchase of the bags of insulation. Purchases 6,875.00 Accounts Payable 6,875.00 (Purchased inventory on account) Feedback 2. Prepare the entry to record the payment for shipping. Transportation-In 320.00 Cash 320.00 (Paid cash for shipping fees) Feedback 3. Prepare the entry for the return of the defective bags. Accounts Payable 275.00 Purchase Returns and Allowances 275.00 (Returned merchandise) Feedback 4. Prepare the entry to record the payment for the bags kept by Compass. Accounts Payable 6,600.00 5. What is the total cost of this purchase? 6,920 Feedback 6. CONCEPTUAL CONNECTION: Compare your answers with the answers in the table below, which were calculated using the perpetual inventory system: Date Account and Explanation Debit Credit Inventory* 6,875 Accounts Payable 6,875 (Purchased inventory on account) Inventory 320 Cash 320 (Paid shipping fees) Accounts Payable 275 Inventory** 275 (Returned merchandise) Accounts Payable 6,600 Cash*** 6,600 (Paid for bags purchased on account) What are the differences? Be sure to explain why the differences occurred. The input in the box below will not be automatically graded, but may be reviewed and considered by your instructor