Question

During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $4,000 from Diamond Inc. with terms 2.0/15, n/60. 5 Returned goods costing $1,000 to Diamond Inc. for full credit. 6 Purchased goods from Club Corp. for $1,550 with terms 2.0/15, n/60. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full.

Required: Assume that Ace uses a perpetual inventory system and that the company had no inventory on hand at the beginning of the month. Calculate the cost of inventory as of June 30. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

		Transaction	Balance
	Beginning Inventory	-	-
Jun-03	Purchased Goods from Diamond (4000*(1-0.02))	3,920.00	3,920.00
Jun-05	Returned goods to Diamond (1000*(1-0.02))	-     980.00	2,940.00
Jun-06	Purchased Goods from Club Corp (1550*(1-0.02)	1,519.00	4,459.00
Jun-11	No Entry		4,459.00
Jun-22	Discount Lost	31.00	4,490.00
Jun-30	Balance		4,490.00

Since Club corp is paid after the number of days discount is allowed, we will record discount lost on date of payment