Reference no: EM132473608

Some of the transactions of Headland Company during August are listed below. Headland uses the periodic inventory method.

August 10

Point 1: Purchased merchandise on account, $9,600, terms 2/10, n/30.13

Point 2: Returned part of the purchase of August 10, $1,100, and received credit on account.15

Point 3: Purchased merchandise on account, $13,500, terms 1/10, n/60.25

Point 4: Purchased merchandise on account, $16,900, terms 2/10, n/30.28

Point 5: Paid invoice of August 15 in full.

Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses:

Question 1: Prepare the adjusting entry necessary on August 31 if financial statements are to be prepared at that time. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)