Old Fashioned Candy Company (see BE5-2) has decided to expand its sales to include Canada Mints. It purchases 500 packages from its supplier at a cost of $5.50 per package, terms 2/10, n/30, FOB shipping point. The freight charges are $75. Old Fashioned Candy Company pays for the merchandise within the discount period. What are the total cost and cost per package of this inventory item, and the balance in the Merchandise Inventory control account in the general ledger after these transactions?
Jan. 2 Xiaoyan purchased $20,000 of merchandise from Feng Company, terms n/30, FOB shipping point.
4 The correct company paid freight costs of $215.
6 Xiaoyan returned $1,500 of the merchandise purchased on January 2 because it was not needed.
Feb. 1 Xiaoyan paid the balance owing to Feng.