Roley Corporation uses a periodic inventory system and the gross method of accou
ID: 2501440 • Letter: R
Question
Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts.
(a) On July 1, (1) Roley purchased $60,000 of inventory, terms 2/10, n/30, FOB shipping point. (2) Roley paid freight costs of $1,200.
(b) On July 3, Roley returned damaged goods and received credit of $6,000.
(c) On July 10, Roley paid for the goods.
Prepare all necessary journal entries for Roley. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Date Account Titles and Explanation Debit Credit
(a) (1) July 1 ________________________ ___________ _______________
_______________________ ____________ _______________
(a) (2) _____________________________ ____________ _______________
____________________________ _____________ _______________
(b) July 3 _________________________ _____________ _______________
_________________________ ______________ ________________
(c) July 10 ________________________ _______________ ________________
________________________ ______________ ___________________
________________________ _______________ ___________________
Explanation / Answer
No Date Account Title & Explaination Debit Credit (a) (1) July 1 Purchase 60000 Accounts Payable 60000 (a) (2) Freight in 1200 Cash 1200 (b) July 3 Accounts Payable 6000 Purchase Return 6000 (c ) July 10 Accounts Payable (60000-6000) 54000 Purchase Return (54000*2%) 1080 Cash 52920
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