Purchase-Related Transactions The debits and credits from four related transactions, (1) through (4), are presented in the following T accounts. Assume that the freight terms were FOB shipping point and that the credit terms were 1/10, n/30. Cash Accounts Payable (2) 150 (3) 1,980 (1) 13,860 (4) 11,880 (4) 11,880 Inventory (1) 13,860 (3) 1,980 (2) 150 a. Describe each transaction. 1. Purchased merchandise on account net of discount. 2. Paid freight. 3. An allowance for return of merchandise was granted by the creditor. 4. Paid the balance due within the discount period. b. Determine the invoice amount of the merchandise that was returned in (3). Purchase-Related Transactions Stylon Co., a women's clothing store, purchased $16,000 of merchandise from a supplier on account, terms FOB destination, 1/10, n/30, using the net method under a perpetual inventory system. Stylon returned merchandise with an invoice amount of $2,400, receiving a credit memo. a. Journalize Stylon's entry to record the purchase. If an amount box does not require an entry, leave it blank. Inventory Accounts Payable Feedback b. Journalize Stylon's entry to record the merchandise return. If an amount box does not require an entry, leave it blank. Accounts Payable Inventory Feedback C. Journalize Stylon's entry to record the payment within the discount period of 10 days. If an amount box does not require an entry, leave it blank. Accounts Payable Cash Feedback d. Journalize Stylon's entry to record the payment beyond the discount period of 10 days. If an amount box does not require an entry, leave it blank. Accounts Payable Inventory 111 lll Cash Purchase-Related Transactions Journalize entries for the following related transactions of Lilly Heating & Air Company using the net method under a perpetual inventory system. (If an amount box does not require an entry, leave it blank.) a. Purchased $45,000 of merchandise from Schell Co. on account, terms 2/10, n/30. Inventory 88 Accounts Payable-Schell Co. Feedback b. Paid the amount owed on the invoice. Accounts Payable-Schell Co. Cash Feedback c. Discovered that merchandise with an invoice amount of $9,000 purchased in (a) was defective and returned items, receiving credit. Accounts Payable-Schell Co. Inventory Feedback d. Purchased $7,100 of merchandise from Schell Co. on account, terms n/30. Inventory Accounts Payable-Schell Co. Feedback e. Received a refund from Schell Co. for return in (c) less the purchase in (d). Cash Accounts Payable-Schell Co