Ultimate Comfort Ware (UCW) sells high-end yoga pants to local retailers. It begins the month with 74 pairs of pants on hand, with a cost per pair of $47. UCW had the following transactions during the month of May:

May 2 Purchased 125 pairs of yoga pants at $48 per pair from Luxury Athletics Inc. Terms of purchase are n/30.

May 14 Returned 5 pairs of yoga pants to Luxury Athletics for full credit, and paid for the remainder of the purchase.

May 18 Purchased 43 pairs of yoga pants at $46 each from Cotton Textiles. Terms of purchase are n/30. May 22 Arranged an allowance of $85 from Cotton Textiles for pants delivered in the wrong colour.

May 25 Made payment to Cotton Textiles. May 26 Sold 95 pairs of yoga pants on account at a selling price of $99 each.

Required:

1. Prepare journal entries for each of the above transactions, assuming a periodic inventory system is used.

2. Prepare the adjusting entry required for inventory on May 31, assuming that ending inventory has a cost of $6,100.