Presented here are selected transactions for Shaoshi Inc. during October of the current year. Shaoshi uses a perpetual inventory system.

Oct. 1 Purchased merchandise on account from Micron Ltd. at a cost of $65,000, terms 1/15, n/30, FOB shipping point.

1 Freight charges of $1,600 were paid by the appropriate party on the October 1 purchase of merchandise.

5 Returned for credit $7,000 of damaged goods purchased from Micron on October 1.

8 Sold the remaining merchandise purchased from Micron to Guidant Corp. for $100,000 on account, with a cost of $59,600, terms 2/10, n/30, FOB destination.

9 Freight charges of $2,300 were paid by the appropriate party on the October 8 sale of merchandise.

10 Guidant returned damaged merchandise that was purchased on October 8 for a $4,000 credit on account. The merchandise originally cost $2,384 and was not restored to inventory.

12 Purchased supplies for $5,000 cash.

15 Purchased merchandise for $7,500 cash.

17 Received the balance owing from Guidant.

20 Purchased equipment on account for $45,000.

28 Sold merchandise for $30,000 on account to Deux Ltée, terms 2/10, n/30, FOB shipping point. The merchandise had a cost of $18,000.

29 Freight charges of $750 were paid by the appropriate party on the October 28 sale of merchandise.

30 Paid Micron the balance owing.

31 Deux returned some of the merchandise that was purchased on October 28 for a $5,000 credit on account. The merchandise originally cost $3,000 and was restored to inventory.

Instructions

(a) Record the October transactions on Shaoshi's books.

(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.