Reference no: EM132796816

Crane Stores is a new company that started operations on March 1, 2017. The company has decided to use a perpetual inventory system. The following purchase transactions occurred in March:

1. Mar. 1 Crane Stores purchases $8,700 of merchandise for resale from Octagon Wholesalers, terms 2/10, n/30, FOB shipping point.
2. Mar. 2 The correct company pays $165 for the shipping charges.
3. Mar. 3 Crane returns $1,100 of the merchandise purchased on March 1 because it was the wrong colour. Octagon gives Crane a $1,100 credit on its account.
4. Mar. 21 Crane Stores purchases an additional $12,000 of merchandise for resale from Octagon Wholesalers terms 2/10, n/30, FOB destination.
5. Mar.22 The correct company pays $185 for freight charges.
6. Mar.23 Crane returns $500 of the merchandise purchased on March 21 because it was damaged. Octagon gives Crane a $500 credit on its account.
7. Mar.30 Crane pays Octagon the amount owing for the merchandise purchased on March 1.
8. Mar.31Crane pays Octagon the amount owing for the merchandise purchased on March 21.

Do the following:

problem 1: Prepare Crane Stores' journal entries to record the above transactions.

problem 3: Post the transactions to the merchandise inventory account. Compare the total in this account with the total of the cash paid during March by Crane for the purchase of inventory. (Note: assume there were no sales of inventory in March.) (total cash inventory in march at the end)