Spring 2018 Problem 1 Required: Prepare journal entries for the following mercha

Question

Spring 2018 Problem 1 Required: Prepare journal entries for the following merchandising transactions of Murdock Company which applies the perpetual inventory system to the attached journal. If the transaction stipulates terms identify them in the explanation. If the transaction requires Accounts Receivable identify the customer. If the transaction requires Accounts Payable identify the vendor. 2017 May 5 Purchased merchandise on account from Li Co. for $ 95,000, under credit terms 2/10 n 30, FOB Shipping Point. The invoice was dated May 5. 6 Received a S 2,600 credit memorandum from Li Co. for a return of 7 Paid S 345 cash for the shipping cost from the purchase on May S 9 Sold merchandise on account to Nickerson Co. for $ 52,000; terms 3/15 10 Nickerson Co. returmed $ 4,000 of the merchandise we sold to them on 15 Paid Li Co. for the purchase on May 5 18 Sold merchandise for cash $ 16,000. The cost of the merchandise is a portion of the merchandise purchased on May 5. n 60. The cost of the merchandise was S 27,000, FOB Destination. May 9. The cost of the merchandise returned was $ 2,100. $7,000 Paid Moyer Courier Service $ 160 for merchandise delivered from the sale to Nickerson earlier in the month. 22 Received a check for the amount due from Nickerson Co. for the sale on May 9. 24 30 Paid cash for the May telephone bill, S 180

Explanation / Answer

Journal Entry Date Description Debit Credit 05-May Merchandise Inventory- $95,000.00 Account Payable- LI Co. $95,000.00 To Record Merchandise Purchase 06-May Account Payable- LI Co. $2,600.00 Merchandise Inventory $2,600.00 To Record Merchandise returned 07-May Transportation Expense $345.00 Cash $345.00 To record Shipping Cost on 05-May purchase 09-May Account Receivable-Nickerson Co. $52,000.00 Sales $52,000.00 To Record Mechandise Sold Cost of Merchandise Sold $27,000.00 Merchandise Inventory $27,000.00 To record for Adjustment in Inventory 10-May Sales Return and Allowance $4,000.00 Account Receivable-Nickerson Co. $4,000.00 To Record Sales Return Merchandise Inventory $2,100.00 Cost of Merchandise Sold $2,100.00 To Record return inventory in Stock 15-May Account Payable- LI Co. $92,400.00 Cash $91,476.00 Purchase Discount $924.00 TO Record Payment made after adjustment of 2%Discount 18-May Cash $16,000.00 Sales $16,000.00 To Record Mechandise Sold Cost of Merchandise Sold $7,000.00 Merchandise Inventory $7,000.00 To record for Adjustment in Inventory 22-May Courier Charges $160.00 Cash $160.00 To Record Courier Charges Paid 24-May Cash $46,560.00 Sales Discount $1,440.00 Account Receivable-Nickerson Co. $48,000.00 To Record Amount received 22-May Telephone Charges $180.00 Cash $180.00 To Record Telephone Charges Paid

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