Question

1. Freeman Corporation, which uses a perpetual inventory system, bought inventory for $10,000 and paid $300 freight on the purchase. Freeman returned goods that cost $2,000 and paid for the goods within the 2% discount period. As a result of these transactions, the inventory account increase by

a

$10,000.

b

$8,140.

c

$0.

d

$7,840.

2.

When a purchaser that uses the perpetual system pays freight, the account debited is

Purchases.

Freight-Out.

Inventory.

Freight-In.

Answer 1

Solutioa (1) purchave coft freight charges $ 10000 300 A300 Retaans C2000) Ner purchases $ 8300 F discount CI0000-2000 x2 C160) 3140