eBook Calculator Cornerstone Exercise 6-20 (Algorithmic) Recording Purchase Transactions Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April: a. On April 1, Mathis Company purchased merchandise on account from Reece Company with credit terms of 2/10, n/30. The selling price of the merchandise was $3,300, and the cost of the merchandise sold was $2,450. b. On April 1, Mathis paid freight charges of $100 cash to have the goods delivered to its warehouse. c. On April 8, Mathis returned $1,000 of the merchandise which had originally cost Reece $700. d. On April 10, Mathis paid Reece the balance due. Required: Prepare the journal entry to record the April 1 purchase (ignore any freight charges) of merchandise by Mathis Company. April 1 Purchases 3,300 Inventory 3,300 (Purchased inventory on account) Prepare the journal entry to record the payment of freight on April 1. April 1 Transportation-In x 2,450 x 12,450 X Inventory x (Recorded the payment of freight charges) Feedback Check My Work Mathis is the buyer. From the buyer's perspective, the historical cost principle implies that inventory cost will include the purchase price of the inventory plus any cost of bringing the goods to a salable condition and location. Check My Work 2 more Check My Work uses remaining.