On May 11, 2014, Wilson Purchasing purchased $23,500 of merchandise from Hostel

Question

On May 11, 2014, Wilson Purchasing purchased $23,500 of merchandise from Hostel Sales; terms 1/10, n/90, FOB Hostel Sales. The cost of the goods to Hostel was $18,500. Wilson paid $1,350 to Express Shipping Service for the delivery charges on the merchandise on May 11. On May 12, Wilson returned $3,700 of goods to Hostel Sales, which restored them to inventory. The returned goods had cost Hostel $2,900. On May 20, Wilson mailed a cheque to Hostel for the amount owed on that date. Hostel received and recorded the cheque on May 21.

1. Record the purchase of merchandise on credit; 1/10, n/90 .

2. Record the payament of shipping charges on purchased mechangdise.

3.Record the return of unacceptable merchandise.

4.Record the payment of balance within the discount period.

Explanation / Answer

On May 11, 2014, Wilson Purchasing purchased $23,500 of merchandise from Hostel

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