Problem Eagle Hardware Store Lid completed the following merchandising transactions in the month of May 2018 At the beginning of May , Eagle 's ledger showed Cash $7 000 ; Accounts Receivable $1 500 ; Inventory 53 , 500 ; Common Shares $8, 000 ; and Retained Earnings $4 , 000 . Eagle Hardware uses a perpetual inventory system May 1 ST Purchased merchandise on account from Depot Wholesale Supply Lid for $5 , 800 , terms 1 / 10 1 / 30 , FOR shipping poin 3 rd Freight charges of $145 were paid by the appropriate party on the merchandise purchased on May 1 Ath Sold merchandise on account to Shep Lid for $3 500 , terms 2 / 10 n / 30 , FOR destination . The cost of the merchandise was $2 100 7 th Freight charges of 590 were paid by the appropriate party on the May 4 sale