Record each of the following transactions, in chronological order, using T accou

Question

Record each of the following transactions, in chronological order, using T accounts, assuming the perpetual inventory system is used: Aug. 2 Purchased merchandise on credit from Vera Company, invoice dated August 1, terms n/10, FOB shipping point, $1,150. 3 Received bill from Strauss Shipping Company for transportation costs on August 2 shipment, invoice dated August 1, terms n/30, $105. 7 Returned damaged merchandise received from Vera Company on August 2 for credit, $180. 10 Paid in full the amount due to Vera Company for the purchase of August 2, part of which was returned on August 7.

Explanation / Answer

Solution:

Merchandise Inventory Date Particulars Debit Date Particulars Credit 2-Aug To Accounts payable $1,150.00 7-Aug By Accounts payable $180.00 3-Aug To Accounts payable (Transportation) $105.00 Ending balance $1,075.00 Total $1,255.00 Total $1,255.00

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