(a) On June 10, Tuzun Company purchased $8,400 of merchandise from Epps Company,
ID: 2484435 • Letter: #
Question
(a) On June 10, Tuzun Company purchased $8,400 of merchandise from Epps Company, FOB shipping point, terms 4/10, n/30. Tuzun pays the freight costs of $430 on June 11. Damaged goods totaling $300 are returned to Epps for credit on June 12. The fair value of these goods is $150. On June 19, Tuzun pays Epps Company in full, less the purchase discount. Both companies use a perpetual inventory system.
Accounts Titles & Explanation Debit Credit
6/10 --------------------------------------- --------- -----------
---------------------------------------- ------------- ------------
6/11 ---------------------------------------- ------------- -------------
---------------------------------------- ------------- --------------
612 ---------------------------------------- ------------ -------------
----------------------------------------- ------------- ---------------
6/19 ----------------------------------------- ------------- ---------------
----------------------------------------- ------------- ----------------
------------------------------------------ ------------- ----------------
(b) Prepare seperate entries for each transaction for Epps Company. The merchandise purchased by Tunzun on June 10 had cost Epps $5,310.
Account Titles and Explanation Debit Credit
6/10 ---------------------------------------- ------------- ----------
---------------------------------------- -------------- ----------
-------------------------------------- --------------- ------------
-------------------------------------- -------------- -------------
6/12 -------------------------------------- --------------- ----------------
-------------------------------------- ---------------- ----------------
______________________ __________ _________
______________________ ___________ _________
6/19 -------------------------------------- ---------------- -----------------
-------------------------------------- ------------------ -----------------
-------------------------------------- ------------------ ------------------
*Please present responses clearly*
Explanation / Answer
Dr Merchandise inventory 8400
Cr AP 8400
Dr Merchandise inventory 430
Cr Cash 430
Dr AP 300
Cr Merchandise inventory 300
(b)
Dr AR 8400
Cr Sales 8400
Dr COGS 5310
Cr MI 5310
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