Date Account Titles and Explanation Debit Credit Date Account Titles and Explana
ID: 2375859 • Letter: D
Question
Date Account Titles and Explanation Debit Credit Date Account Titles and Explanation Debit Credit June 10 (To record credit sale.) (To record cost of merchandise sold.)June 12 (To record merchandise returned.)
(To record cost of merchandise returned.)
June 19 Exercise 5-4 On June 10, Rebecca Company purchased $7,600 of merchandise from Clinton Company, FOB shipping point, terms 2/10, n/30. Rebecca pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Clinton for credit on June 12. The fair value of these goods is $70. On June 19, Rebecca pays Clinton Company in full, less the purchase discount. Both companies use a perpetual inventory system.
(a) Prepare separate entries for each transaction on the books of Rebecca Company. (Record journal entries in the order in which they must have occurred. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
(b) Prepare separate entries for each transaction for Clinton Company. The merchandise purchased by Rebecca on June 10 had cost Clinton $4,300. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit June 10
(To record credit sale.)
(To record cost of merchandise sold.)
June 12
(To record merchandise returned.)
(To record cost of merchandise returned.)
June 19
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Explanation / Answer
a) 6/10
DR: Inventory - 7,600
CR: Accounts Payable - 7,600
6/11
DR: Inventory - 400
CR: Cash - 400
6/12
DR: Accounts payable - 300
CR: Inventory - 300
6/19
DR: Accounts payable - 7,300
CR: Cash - 7,154 (7,300 x .98)
CR: Purchase discount - 146 (7,300 x .02)
b) 6/10
DR: Accounts receivable - 7,600
CR: Sales - 7,600
(to record credit sale)
DR: Cost of goods sold - 4,300
CR: Inventory - 4,300
(cost of merchandise sold)
6/12
DR: Sales returns - 300
CR: Accounts receivable - 300
(record merchandise returned)
DR: Inventory - 70
CR: Cost of goods sold - 70
(record cost of merchandise returned)
6/19
DR: Cash - 7,154
DR: Sales Discounts - 146
CR: Accounts receivable - 7,300
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