Presented here are selected transactions for Sheridan Inc. during August of the current year. Sheridan uses a perpetual inventory system. It estimates a return rate of 10%, based on past experience. Aug. 1 Purchased supplies for $2,900 cash. 3 Purchased inventory on account from Kenliwa Corp. at a cost of $40,000, terms 2/20, n/45, FOB shipping point. 4 Freight charges of $1,400 were paid by the appropriate party on the August 3 inventory purchase. 6 Sold goods costing $13,600 to Penkwa Limited for $34,000 on account, terms n/30, FOB destination. 7 Freight charges of $400 were paid by the appropriate party on the August 6 sale of inventory. 9 Returned damaged goods costing $3,000 that were originally purchased from Kenliwa on September 3. Received a credit on account. 10 Purchased equipment on account for $49,000, terms n/45, FOB destination. 11 Freight charges of $500 were paid by the appropriate party on the August 10 purchase of equipment. 13 Purchased inventory for $3,400 cash. 15 Received the balance due from Penkwa. 22 Paid Kenliwa the balance due. 26 223 27 Sold inventory costing $12,000 to Makoons Inc. for $24,000 on account, terms n/45, FOB shipping point. Freight charges of $800 were paid by the appropriate party on the August 26 sale of inventory. 30 Makoons returned goods sold for $1,500 that cost $700. The merchandise was restored to inventory.