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29 March, 17:35

Shankar Company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 2 for $22,000. In addition to the cost of inventory, the company also pays $420 for freight charges associated with the purchase on the same day. Record the purchase of inventory on February 2, including the freight charges. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the purchase of inventory on account.

2. Record the payment of freight charges in cash.

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Answers (1)
  1. 29 March, 17:50
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    1.

    February 2

    Dr Purchased Inventory $22,000

    Cr Accounts Payable $22,000

    2.

    February 2

    Dr Inventory 420

    Cr Cash 420

    Explanation:

    Shankar Company Journal entry

    1.

    February 2

    Dr Purchased Inventory $22,000

    Cr Accounts Payable $22,000

    (To rcord the purchase of inventory on account)

    2.

    February 02

    Dr Inventory 420

    Cr Cash 420

    (To record the payment of freight charges in cash)
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