Diveston Inc. purchased $1,000$ bags of insulation, on account, from Warmco, Inc. The bags of insulation cost $$4\mathrm{.}25$ each. Diveston paid Giacamini Transporation $$276$ to have all $1,000$ bags of insulation shipped to its warehouse. Diveston returned $50$ bags that were defective and paid for the remainder. Assume that Diveston uses the perpetual inventory system and that Warmco did not offer a purchase discount.

Required:

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$1.$ Prepare a journal entry to record the purchase of the bags of insulation. If an amount box does not require an entry, leave it blank.

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$2.$ Prepare the entry to record the payment for shipping. If an amount box does not require an entry, leave it blank.

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$3.$ Prepare the entry for the return of the defective bags. If an amount box does not require an entry, leave it blank. Round to the nearest cent.

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$4.$ Prepare the entry to record the payment for the bags kept by Diveston. If an amount box does not require an entry, leave it blank. Round to the nearest cent.

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$5.$ What is the total cost of this purchase? Round to the nearest cent.

Answer rating: 100% (QA)

1 Journal entry to record the purchase of the bags of insulation Date ... View the full answer