Data for Shaoshi Inc. are presented in P5.12A(a).
In P5.12A(a).
Sept. 2 Purchased equipment on account for $65,000, terms n/30, FOB destination.
3 Freight charges of $950 were paid by the appropriate party on the September 2 purchase of equipment.
4 Purchased supplies for $4,000 cash.
6 Purchased inventory on account from Hillary Corp. at a cost of $65,000, terms 1/15, n/30, FOB shipping point.
7 Freight charges of $1,600 were paid by the appropriate party on the September 6 inventory purchase.
8 Returned damaged goods costing $5,000 that were originally purchased from Hillary on September 4. Received a credit on account.
9 Sold goods costing $15,000 to Fischer Limited for $20,000 on account, terms 2/10, n/30, FOB destination.
10 Freight charges of $375 were paid by the appropriate party on the September 9 sale of inventory.
17 Received the balance due from Fischer.
20 Paid Hillary the balance due.
21 Purchased inventory for $6,000 cash.
22 Sold inventory costing $20,000 to Kun-Tai Inc. for $27,000 on account, terms n/30, FOB shipping point.
23 Freight charges of $500 were paid by the appropriate party on the September 22 sale of inventory.
28 Kun-Tai returned goods sold for $10,000 that cost $7,500. The merchandise was restored to inventory.
Instructions
(a) Record the October transactions on Shaoshi's books, assuming it uses a periodic inventory system instead of a perpetual inventory system.
(b) Assume that Shaoshi took advantage of the 1% purchase discount offered by Micron Ltd. and paid Micron on October 14 rather than October 30. Record the entry that Shaoshi would make on October 14 and determine the cost of missing this purchase discount to Shaoshi.