B Prepare journal entries to record the following merchandising transactions of

Question

B Prepare journal entries to record the following merchandising transactions of IKEA, which uses th. petual inventory system and gross method. (Hint: It will help to identify each receivable and payable example, record the purchase on May 2 in Accounts Payable-Havel.) May 2 Purchased merchandise from Havel Co. for $10,000 under credit terms of 1/15, n/30. es- shipping point, invoice dated May 2. 4 Sold merchandise to Rath Co. for $11.000 under credit terms of 2/10. n/60, FOB point, invoice dated May 4. The merchandise had cost $5,600 h for freight charges on the purchase of May 2. 5 Paid $250 cas 9 Sold merchandise that had cost $2,000 for $2,500 cash. 10 Purchased merchandise from Duke Co. for $3,650 under credit terms of 2/15, n/60, FOB des- tination, invoice dated May 10. Received a $650 credit memorandum from Duke Co. for the return of a portion of the dise purchased on May 10. Received the balance due from Rath Co. for the invoice 12 merchan- ash, 14 dated May 4, net of the discount. 20 old merchandise that ost S1.50 o Tamer Co. for $2.800 under credit terms of 2/15, a/a ash FOB shipping point, invoice dated May 20. 22 Issued a $300 credit memorandum to Tamer Co. for an allowance on goods sold on May 20 25 Paid Duke Co. the balance due, net of the discount. 30 Received the balance due from Tamer Co. for the invoice dated May 20, net of discount and ash allowance 31 Sold merchandise that cost $3,600 to Rath Co. for s7.200 under credit terms of 2/10, a/l FOB shipping point, invoice dated May 31

Explanation / Answer

May Merchandise inventory 10000 2 Accounts payable-Havel Co. 10000 4 Accounts receivable-Rath Co. 11000 Sales revenue 11000 Cost of goods sold 5600 Merchandise inventory 5600 5 Merchandise inventory 250 Cash 250 9 Cash 2500 Sales revenue 2500 Cost of goods sold 2000 Merchandise inventory 2000 10 Merchandise inventory 3650 Accounts payable-Duke Co. 3650 12 Accounts payable-Duke Co. 650 Merchandise inventory 650 14 Cash (11000*98%) 10780 Sales discounts 220 Accounts Receivable-Rath & Co. 11000 17 Accounts payable-Havel Co. 10000 Merchandise inventory (10000*1%) 100 Cash 9900 20 Accounts receivable-Tamer Co. 2800 Sales revenue 2800 Cost of goods sold 1450 Merchandise inventory 1450 22 Sales returns and allowances 300 Accounts receivable-Tamer Co. 300 25 Accounts payable-Duke Co. 3000 Merchandise inventory (3000*2%) 60 Cash 2940 30 Cash (2500*98%) 2450 Sales discounts (2500*2%) 50 Accounts Receivable-Rath & Co. 2500 31 Accounts receivable-Rath Co. 7200 Sales revenue 7200 Cost of goods sold 3600 Merchandise inventory 3600

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