The following transactions occurred in June and July. Pele Company uses a perpetual inventory system.
June 10 Pele Company purchased $4,000 of merchandise from Duvall Company, terms 2/10, n/30, FOB shipping point.
11 The correct company paid $375 of freight costs to Hoyt Movers.
12 Damaged goods totaling $200 were returned to Duvall for credit.
20 Pele paid Duvall Company in full.
July 15 Pele sold all of the remaining merchandise purchased from Duvall for $9,275 cash.
15 Pele paid $350 of freight costs to AAA Transit to deliver the goods to the customer.
17 Pele gave its customer a $500 cash sales allowance for damaged goods. Pele uses a perpetual inventory system.
Instructions
(a) Record each of the above transactions on the books of Pele Company.
(b) Prepare closing entries on July 31 for the temporary accounts.