Recording the Cost of Purchases for a Merchandiser
Elite Apparel purchased 90 new shirts and recorded a total cost of $2,735 determined as follows:
Invoice cost $2,250
Shipping charges 185
Import taxes and duties 165
Interest (6.0%) on $2,250 borrowed to finance the purchase 135
$2,735
Required:
Make the needed corrections in this calculation. Give the journal entry(ies) to record this purchase in the correct amount, assuming a perpetual inventory system. Show computations.