Question

Lawrence Appliances had the following purchase transactions. Journalize all necessary transactions using the periodic inventory system. Explanations are not required.

Sep. 4 Purchased inventory of \(6,900 on account from Max Appliance Wholesale, an appliance wholesaler. Terms were 3/15, n/30, FOB shipping point.

4 Paid freight charges, \)480.

10 Returned \(300 of inventory to Max.

17 Paid Max Appliance Wholesale, less return, and discount.

20 Purchased inventory of \)3,900 from MY Appliance, an appliance wholesaler. Terms were 1/10, n/45, FOB destination.

22 Received a $400 allowance from MY Appliance for damaged but usable goods.

29 Paid MY Appliance, less allowance and discount.

Short answer

The total of debits and credits is$22,080.

Step-by-step solution

Meaning of Raw Materials 

In cost accounting, raw material denotes the goods required to be processed before selling them to the consumers. Raw materials pass through the production process and appear asfinished goods.

Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
Sep 4	Purchases	6,900
	Accounts payable		6,900
Sept 4	Freight in	480
	Cash		480
Sep 10	Accounts payable	300
	Purchase returns		300
Sep 17	Accounts payable (6900-300)	6,600
	Purchase discount (6600*3%)		198
	Cash		6402
Sep 20	Purchases	3,900
	Accounts payable		3,900
Sep 22	Accounts payable	400
	Purchase allowance		400
Sep 29	Accounts payable (3900-400)	3,500
	Purchase discount (3500*1%)		35
	Cash		3,465