Purchased merchandise from Arotek Company for $9.000 under credit terms of 1/10,

Question

Purchased merchandise from Arotek Company for $9.000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Sold merchandise to Laird Corp. for $6.300 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,498 Purchased merchandise from Waters Corporation for $8.300 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. The invoice showed that at Sheng's request, Waters paid the $240 shipping charges and added that amount to the bill. Paid $120 cash for shipping charges related to the August 5 sale to Laird Corp. Laird returned merchandise from the August 5 sale that had cost Sheng $750 been sold for $1,050. The merchandise was restored to inventory.

Explanation / Answer

Date Account Title & Explanation Debit Credit Aug 1 Inventory 9000 Arotek Company 9000 Aug 5 Laird Corp 6300 Sales 6300 Aug 5 Cost of Goods Sold 4498 Inventory 4498 Aug 8 Inventory 8540 Waters Corporation (8300+240) 8540 Aug 9 Delivery Expense 120 Cash 120 Aug 10 Sales Return & Allowances 1050 Inventory 750 Laird Corp 1050 Cost of Goods Sold 750 Aug 12 Waters Corporation 1253 Inventory 1253 Aug 14 Inventory 320 Cash 320 Aug 15 Cash 5145 Sales Discounts : (5250*2%) 105 Laird Corp: (6300-1050) 5250 Aug 18 Waters Corporation :(8300+240-1253) 7287 Inventory: (8300-800)*1% 75 Cash 7212 Aug 19 Tux Company 5400 Sales 5400 Aug 19 Inventory 3748 Cost of Goods Sold 3748 Aug 22 Sales Return & Allowances 900 Tux Company 900 Aug 29 Cash 4455 Sales Discounts: (5400-900)*1% 45 Tux Company: (5400-900) 4500 Aug 30 Arotek Company 9000 Cash 9000

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