The following transactions were completed by Montrose Company during May of the current year. Montrose Company uses a perpetual inventory system.

May.3 Purchased merchandise on account from Floyd Co., $4,000, terms FOB shipping point,2/10, n/30, with prepaid transportation costs of $120 added to the invoice.

1. Purchased merchandise from Kramer Co., $8.500, terms FOB destination , 1/10, n/30.
2. Sold merchandise on account to C.F. Howell Co., list price $4,000, trade discount 30%, terms 2/10, n/30. The cost of merchandise sold was $1,125.

8. Purchased office supplies for cash $150.

1. Return merchandise purchased on May 5 from Kramer Co., $1,300.
2. Paid Floyd Co., on account for purchase of May 3, less discount
3. Purchased merchandise for cash $10,500.
4. Paid Kramer Co. on account for purchase on May 5, less return of May 10 and discount.
5. Received cash on account from sale of May 6 to C. F. Howell Co., less discount.
6. Sold merchandise on nonbank credit cards and reported accounts to the card company, $2,450. The cost of merchandise sold was $980.
7. Sold merchandise on account to Comer Co.,.$3,480, terms 2/10, n/30. The cost of the merchandise sold was $1,400

24. Sold merchandise for cash, $4,350. The cost of the merchandise sold was $1750.

25. Received merchandise returned by Comer Co., from sale on May 22, $1,480. The cost of the returned merchandise was $600.

31. Received cash from card company for nonbank credit card sales on May 19, les $140 service fee.

Instructions

1. Journalize the preceding transactions

2. Journalize the adjusting entry merchandise inventory shrinkage, $3,750.