Sarasota Warehouse distributes suitcases to retail stores and extends credit terms of n/30 to all of its customers. Sarasota Warehouse uses a perpetual inventory system the earnings approach. At the end of June its inventory consisted of 35 suitcases purchased at $30 each, During the month of July, the following merchandising transactions occurred: July 1 Purchased 50 suitcases on account for $30 each from Trunk Manufacturers, terms 30, FOB destination. 2 The correct company paid $125 freight on the July 1 purchase. 4 Received $150 credit for five suitcases returned to Trunk Manufacturers because they were damaged. 10 Sold 45 suitcases that cost $30 each to Satchel World for $75 each on account. 12 15 18 21 23 Issued a $375 credit for five suitcases returned by Satchel World because they were the wrong colour. The suitcases were returned to inventory. Purchased 60 additional suitcases from Trunk Manufacturers for $27.50 each, terms n/30, FOB shipping point. Paid $150 freight to AA Trucking Company for merchandise purchased from Trunk Manufacturers Sold 60 suitcases that cost $30 each to Fly-By-Night for $75 each on account. Gave Fly-By-Night a $150 credit for two returned suitcases. The suitcases had been damaged and were sent to the recyclers Paid Trunk Manufacturers for the July 1 purchase. I 30 31 Received balance owing from Satchel World.