*Problem 13-1 Described below are certain transactions of Vaughn Corporation. Th
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Question
*Problem 13-1 Described below are certain transactions of Vaughn Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $76,700 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. 2. On April 1, the corporation bought a truck for $49,000 from General Motors Company, paying $3,000 in cash and 3. On May 1, the corporation borrowed $78,300 from Chicago National Bank by signing a $87,420 zero-interest-bearing 4. On August 1, the board of directors declared a $321,600 cash dividend that was payable on September 10 to The invoice was paid on February 26 signing a one-year, 10% note for the balance of the purchase price. note due one year from May 1. stockholders of record on August 31.Explanation / Answer
Journal entries:
Adjusting entries:
Date Account Titles and Explanation Debit Credit Feb-02 Purchases ($76700 x 98%) 75166 Accounts payable 75166 (To record purchases on account net of discount) Feb-26 Accounts payable 75166 Purchase discount lost 1534 Cash 76700 (To record payment on account after discount period) Apr-01 Truck 49000 Cash 3000 Notes payable 46000 (To record purchase of truck) May-01 Cash 78300 Discount on notes payable 9120 Notes payable 87420 (To record borrowing against zero-interest-bearing note) Aug-01 Dividend 321600 Dividend Payable 321600 (To record cash dividends declared) Sep-10 Dividend Payable 321600 Cash 321600 (To record payment of cash dividends)Related Questions
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