On March 30, Francine's Bakery purchased $1,000, plus 13% HST, of merchandise on account from Smithers Company. The goods were shipped F.O.B. shipping point. The freight charge of $80 (includes HST) was paid by Williams Company and added to the invoice. The amount to record in the Inventory account is

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The initial merchandise cost is $1,000 plus 13% HST, which is $1,130. However, the freight charge of $80 (including HST) should be added to the cost of goods purchased, making the total cost $1,080. This is the amount that should be recorded in the Inventory account.

On March 30, Francine's Bakery Purchased $1,000, Plus 13% HST