Question 1

Sheffield Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts.

(a)		On July 1, (1) Sheffield purchased $85,000 of inventory, terms 3/10, n/30, FOB shipping point. (2) Sheffield paid freight costs of $1,094.
(b)		On July 3, Sheffield returned damaged goods and received credit of $8,500.
(c)		On July 10, Sheffield paid for the goods.

Prepare all necessary journal entries for Sheffield. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)