QS 4-5 Recording purchases, returns, and discounts taken LO P1 Prepare journal e
ID: 2414799 • Letter: Q
Question
QS 4-5 Recording purchases, returns, and discounts taken LO P1 Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Nov. 5 Purchased 750 units of product at a cost of $12 per unit. Terms of the sale are 4/10, n/60; the invoice is dated November 5. and received full credit. return on November 7. Nov. 7 Returned 50 defective units from the November 5 purchase Nov. 15 Paid the amount due from the November 5 purchase, less the View transaction list Journal entry worksheetExplanation / Answer
Answer
Date
General Journal
Debit
Credit
Working
05-Nov
Inventory
$ 9,000.00
[750 units x $12]
Accounts Payable
$ 9,000.00
[750 units x $12]
(merchandise purchased on account)
07-Nov
Accounts Payable
$ 600.00
[50 units x $12]
Inventory
$ 600.00
[50 units x $12]
(merchandise returned)
15-Nov
Accounts Payable
$ 8,400.00
[$9000 - $ 600]
Inventory
$ 336.00
[$ 8400 x 4%]
Cash
$ 8,064.00
[$ 8400 x 96%] or [$8400 - $ 336]
(payment made and cash discount received)
Date
General Journal
Debit
Credit
Working
05-Nov
Inventory
$ 9,000.00
[750 units x $12]
Accounts Payable
$ 9,000.00
[750 units x $12]
(merchandise purchased on account)
07-Nov
Accounts Payable
$ 600.00
[50 units x $12]
Inventory
$ 600.00
[50 units x $12]
(merchandise returned)
15-Nov
Accounts Payable
$ 8,400.00
[$9000 - $ 600]
Inventory
$ 336.00
[$ 8400 x 4%]
Cash
$ 8,064.00
[$ 8400 x 96%] or [$8400 - $ 336]
(payment made and cash discount received)
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