Top TV Incorporated, a Big Box Store That Sells Television

Top TV Incorporated, a big box store that sells television sets, bought a large number of a television model at a cost of $500 per unit. The contract reads that if 2000 or more sets are purchased during the year, a rebate of $20 per set will be made. On December 15, the records showed that 1500 sets had been purchased; purchases were recorded at $750,000 (1500 × $500). All these units had been sold. Five hundred more sets were ordered FOB destination. The sets were received on December 22, and a request for the rebate was made. The rebate cheque was received on January 25, after the books were closed. Furthermore, the supplier provides terms of 2/10, n/30. Top TV has a policy of always paying invoices within the discount period. Further investigation reveals that a total of $17,600 of freight was paid to acquire the sets purchased this year, including $3,750 on the last order of 500 sets. Required: A. Calculate the ending inventory value at 31 December. B. What entry should be made relative to the rebate on 31 December? C. What entry would be made on 25 January?