I am including exercise 8.11 because we are to refer to it for the question. Exe
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Question
I am including exercise 8.11 because we are to refer to it for the question.
Exercise 8.11 (page 239): Hegge Company uses the periodic inventory system. Journalize the following entries for April, assuming Hegge Company uses the gross price method of recording direct material purchases.
Apr 6 Purchased $15,100 in direct materials from Kunzman Wholesale; terms 1/15, n/30, FOB shipping point.
Apr 9 Paid Carper Transit $250 freight charges on the purchase of April 6th.
Apr 12 Returned $1,400 gross price of direct materials from the April 6th purchase to Kunzman Wholesale because the items were the wrong model.
Apr 30 Paid Kunzman Wholesale the amount due.
Refer to Exercise 8.11. Make the journal entries assuming Hegge uses the perpetual inventory system and the gross price method.
Explanation / Answer
6Apr Merchandise Inv Dr15,100
Acct Payable Cr 15100
(FOB Shipping pt indicated that Buyer pays shipping Terms 1/15 N/30)
9Apr paid freight bill of $250 for purchase
9 Apr Freight-In Dr 250
Cash Cr 250
(FOB Shippng pt payment)
12Apr returned $1400 of detective merchandise purchase on 6Apr3.
12Apr Acct Paybale Dr1400
Purch Returns Cr 1400
30 Apr Acct Payable 13700
Cash Cr 13700
(Amt paid = 15100-1400 =$13,700. No disc as payment is made after 15 days ie 16Apr)
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