Perpetual inventory system
Using the method perpetual inventory system, how can I record in the journal entries this transactions:
1-John's purchased merchandise on account for $5000.00. Freight charges of $300.00 were paid in cash.
2-John's returned some of the merchandise purchased in 1. The cost of the merchandise was $600.00 and John's account was credited by the supplier.
3-Merchandise costing $2800.00 was sold for $5200.00 in cash.
I think this a correct answer for # 1. If not can someone tell me..?
Debit credit
1- Inventory... $5300
Accounts payable... $5300
Inventory... $300
Cash... $300