4-2B ournal entries perpetual inventory system and gross method. (Hint It will h

Question

4-2B ournal entries perpetual inventory system and gross method. (Hint It will help to identify each receivable and payable; ndising oerpetual Prepare journal entries to record the following merchandising transactions of Menards, which applies the for example, record the purchase on July 3 in Accounts Payable-OLB.) July 3 Purchased merchandise from OLB Corp. for $15,000 under credit terms of 1/10, n/30, FOIB destination, invoice dated July 3 Sold merchandise to Brill Co. for S11,500 under credit terms of 2/10, n/60, FOB destination, invoice dated July 7. The merchandise had cost $7,750. 7 10 Purchased merchandise from Rupert Co.for $14.200 under credit terms of 1/10, n/45. FOB 11 shipping point, invoice dated July 10 Paid $300 cash for shipping charges related to the July 7 sale to Brill Co. Continued on next page..

Explanation / Answer

In the books of Menards:

Date General Journal Debit Credit $ $ July 3 Merchandise Inventory 15,000 Accounts Payable : OLB 15,000 July 7 Accounts Receivable : Brill Co. 11,500 Sales Revenue 11,500 July 7 Cost of Goods Sold 7,750 Merchandise Inventory 7,750 July 10 Merchandise Inventory 14,200 Accounts Payable : Rupert Co. 14,200 July 11 Freight-Out 300 Cash 300 July 12 Sales Returns and Allowances 2,000 Accounts Receivable: Brill Co. 2,000 July 12 Merchandise Inventory 1,450 Cost of Goods Sold 1,450 July 14 Accounts Payable : Rupert Co. 1,200 Merchanise Inventory 1,200 July 15 Accounts Payable: OLB 200 Cash 200 July 17 Cash 9,310 Sales Discounts 190 Accounts Receivable : Brill Co. 9,500 July 20 Accounts Payable : Rupert Co. 13,000 Merchandise Inventory 130 Cash 12,870 July 21 Accounts Receivable : 11,000 Sales Revenue 11,000 July 21 Cost of Goods Sold 7,000 Merchandise Inventory 7,000 July 24 Sales Returns and Allowances 1,000 Accounts Receivable : Brown 1,000 July 30 Cash 9,900 Sales Discounts 100 Accounts Receivable : Brown 10,000 July 31 Accounts Payable : OLB 14,800 Cash 14,800

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