& gross a credit memorandum toward the return of s500 ($490 net) of merchandise

Question

& gross a credit memorandum toward the return of s500 ($490 net) of merchandise that it net PT n/30 purchased on October 2 Purchased uschased merchandise at a s5,400 price (S5,292 net), invoice dated Octoher 17. terms 2/10 27 Paid fo r the merchandise purchased on October 17, less the discount. Paid for the merchandise purchased on October 2. (Payment was m istakenly delayed, which caused the discount to be lost.) aconnect Cabela's, which uses the PROBI Problern ulyPuchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30. Preparing Prepare journal entries to record the following merchandising transactions of C perpetual inventory system and the gross met hod. (Hint: It will help to identify each receivable and pay- able: for example, record the purchase on July 1 in Accounts Payable-Boden.) for merch FOB shipping point, invoice dated July I sol mechandise to Creek Co. for $900 under credit terms of 2/10. n/60. FOB shipping point,set activities system P1 P2 invoice dated July 2. The merchandise had cost $500 3 Paid $125 cash for freight charges on the purchase of July I 8 Sold merchandise that had cost $1,300 for S1,700 cash. 9 Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9 I1 Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. 16 Paid the balance due to Boden Company within the discount period. 19 Sold merchandise that cost $800 to Art Co. for $1.200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. 21 Issued a $100 credit memorandum to Art Co. for an allowance on goods sold on July 19. 24 Paid Leight Co. the balance due, net of discount. 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount. 31 Sold merchandise that cost $4,800 to Creek Co. for $7.000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. $1,07

Explanation / Answer

Inventory A/C Dr

To Boden Company

Creek And Co. Dr

To Sales

Cost of Goods Sold .Dr

To Inventory

Inventory A/c. Dr

To Cash A/c

(Being Freight paid)

Cash A/c . Dr

To Sales

Cost of Goods Sold . Dr

To Inventory A/c

Inventory A/c . Dr

To Leight Co

Leight Co . Dr

To Inventory

Cash A/c . Dr

To Creek Co

Being amount recieved after discount)

Discount A/c. Dr

To Creek Co

Boden Company A/c. Dr

To Cash A/c

Boden Company A/c Dr.

To Discount Recived

Art Co A/c . Dr

To Sales

Cost Of Goods Sold . Dr

To Inventory A/c

Inventory A/c

To Cost of Goods sold

Sales A/c .Dr

To Art Co

Leight Co A/c Dr.

To cash A/c

Leght Co A/c Dr

To Discount recieved

Cash A/c . Dr

To Art Co A/c

(1200-100=1100*98%)

Discount A/c Dr

To Art Co A/c

Creek Co A/c Dr

To Sales

Cost of Goods Sold . Dr

To Inventory

DATE Particulars Debit Credit 1

Inventory A/C Dr

To Boden Company

6000 6000 2

Creek And Co. Dr

To Sales

900 900

Cost of Goods Sold .Dr

To Inventory

500 500 3

Inventory A/c. Dr

To Cash A/c

(Being Freight paid)

8

Cash A/c . Dr

To Sales

1700 1700

Cost of Goods Sold . Dr

To Inventory A/c

1300 1300 9

Inventory A/c . Dr

To Leight Co

2200 2200 11

Leight Co . Dr

To Inventory

200 200 12

Cash A/c . Dr

To Creek Co

Being amount recieved after discount)

882 882

Discount A/c. Dr

To Creek Co

18 18 16

Boden Company A/c. Dr

To Cash A/c

5940 5940

Boden Company A/c Dr.

To Discount Recived

60 60 19

Art Co A/c . Dr

To Sales

1200 1200

Cost Of Goods Sold . Dr

To Inventory A/c

800 800 21

Inventory A/c

To Cost of Goods sold

100 100

Sales A/c .Dr

To Art Co

100 100 21

Leight Co A/c Dr.

To cash A/c

2156 2156

Leght Co A/c Dr

To Discount recieved

44 44 30

Cash A/c . Dr

To Art Co A/c

(1200-100=1100*98%)

1078 1078

Discount A/c Dr

To Art Co A/c

22 22 30

Creek Co A/c Dr

To Sales

7000 7000

Cost of Goods Sold . Dr

To Inventory

4800 4800

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