Question 3 (20 points) Alpha Company uses the periodic inventory system for purc
ID: 2414393 • Letter: Q
Question
Question 3 (20 points)
Alpha Company uses the periodic inventory system for purchase of merchandise. Discount terms are 2/10, n30 The following events occurred during the month of Jan.:
Date
Activity
a.
Jan. 3
Purchased on account 350 widgets for $11 each.
b.
Jan. 10
Purchased on account 650 widgets for $12 each.
c.
Jan. 11
Shipping cost for the January 10 purchased merchandise was $400 was paid with a cheque by Alpha directly to the freight company.
d.
Jan. 12
Returned 50 widgets received from Jan. 10 purchase as they were not the correct item ordered.
e.
Jan. 13
Paid for the purchases made on Jan. 3.
f.
Jan. 26
Paid for the purchases made on Jan. 10.
Use this information to prepare the General Journal entries (without explanation) for the January events.
Date
Activity
a.
Jan. 3
Purchased on account 350 widgets for $11 each.
b.
Jan. 10
Purchased on account 650 widgets for $12 each.
c.
Jan. 11
Shipping cost for the January 10 purchased merchandise was $400 was paid with a cheque by Alpha directly to the freight company.
d.
Jan. 12
Returned 50 widgets received from Jan. 10 purchase as they were not the correct item ordered.
e.
Jan. 13
Paid for the purchases made on Jan. 3.
f.
Jan. 26
Paid for the purchases made on Jan. 10.
Use this information to prepare the General Journal entries (without explanation) for the January events.
Explanation / Answer
the following are the journal entries:
date accounts debit credit Jan 3 Purchases a/c $3,850 ..............To Accounts payable a/c $3,850 (amount = 350widgets *$11 =>$3,850) jan 10 Purchases a/c $7,800 .............To Accounts payable a/c $7,800 (amount = 650 widgets *$12 =>$7,800) jan 11 Freight in a/c $400 ..............To Cash a/c $400 Jan 12 Accounts payable a/c $600 ..............To Purchases returns and allowances a/c $600 Jan 13 Accounts payable a/c $3,850 ...........To Purchase discount a/c $77 ...........To cash a/c $3,773 (amount of purchase discount = $3,850 * 2%=>$77, amount of cash = $3850-77=>$3,773) jan 26 Accounts payable a/c $7,200 .............To Cash a/c $7,200 (amount = (650 -50 returned)*$12=>$7,200)Related Questions
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