Compass Inc. purchased 1,250 bags of insulation from Glassco Inc. The bags of insulation cost $5.50 each. Compass paid Turner Trucking $320 to have the bags of insulation shipped to its warehouse. Compass returned 50 bags that were defective and paid for the remainder. Assume that
Compass uses the perpetual inventory system and that Glassco did not offer a purchase discount.
Required:
1. Prepare a journal entry to record the purchase of the bags of insulation.
2. Prepare the entry to record the payment for shipping.
3. Prepare the entry for the return of the defective bags.
4. Prepare the entry to record the payment for the bags kept by Compass.
5. What is the total cost of this purchase?