Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpe
ID: 2544306 • Letter: S
Question
Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System
The following selected transactions were completed during April between Swan Company and Bird Company:
Required:
1. Journalize the April transactions for Bird Company (the buyer).
2. Journalize the April transactions for Swan Company (the seller).
Apr.2. Swan Company sold merchandise on account to Bird Company, $15,100, terms FOB shipping point, 2/10, n/30. Swan Company paid freight of $485, which was added to the invoice. The cost of the merchandise sold was $9,500. 8. Swan Company sold merchandise on account to Bird Company, $31,000, terms FOB destination, 1/15, n/30. The cost of the merchandise sold was $18,600. 8. Swan Company paid freight of $760 for delivery of merchandise sold to Bird Company on April 8. 12. Bird Company paid Swan Company for purchase of April 2. 18. Swan Company paid Bird Company a refund of $2,000 for defective merchandise in the April 2 purchase. Bird Company agreed to keep the merchandise. 23. Bird Company paid Swan Company for purchase of April 8. 24. Swan Company sold merchandise on account to Bird Company, $10,300, terms FOB shipping point, n/45. The cost of the merchandise sold was $6,200. 26. Bird Company paid freight of $320 on April 24 purchase from Swan Company. 30. Swan Company granted a customer allowance (credit memo) to Bird Company for $11,300 for merchandise that was returned from the August 24 purchase. The cost of the merchandise returned was $6,500.Explanation / Answer
Answer 1. Bird Company Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2-Apr Merchandise Inventory 15,585.00 Accounts Payable 15,585.00 (record the purchases) 8-Apr Merchandise Inventory 31,000.00 Accounts Payable 31,000.00 (record the purchases) 12-Apr Accounts Payable 15,585.00 Cash 15,283.00 Merchandise Inventory 302.00 (record the cash paid) 18-Mar Cash 2,000.00 Merchandise Inventory 2,000.00 (record the cash recd for defective inventory) 23-Mar Accounts Payable 31,000.00 Cash 30,690.00 Merchandise Inventory 310.00 (record the cash paid) 24-Apr Merchandise Inventory 10,300.00 Accounts Payable 10,300.00 (record the purchases) 26-Apr Merchandise Inventory 320.00 Cash 320.00 (record the freight paid) 30-Apr Accounts Payable 11,300.00 Merchandise Inventory 11,300.00 (record the purcahse return) Answer 2. Swan Company Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2-Apr Accounts Receivale 15,100.00 Sales 15,100.00 (To record the sales to Bird Company) 2-Apr Accounts Receiavble 485.00 Cash 485.00 (record the freight paid) 2-Apr Cost of Goods Sold 9,500.00 Merchandise Inventory 9,500.00 (Record the cost of goods sold) 8-Apr Accounts Receivale 31,000.00 Sales 31,000.00 (To record the sales to Bird Company) 8-Apr Cost of Goods Sold 18,600.00 Merchandise Inventory 18,600.00 (Record the cost of goods sold) 12-Apr Cash 15,283.00 Sales Discount (15,100 x 2%) 302.00 Accounts Receivable 15,585.00 (record the cash received) 18-Mar Sale Return & Allowances 2,000.00 Cash 2,000.00 (Record the cash paid for defective material) 23-Mar Cash 30,690.00 Sales Discount (31,000 x 1%) 310.00 Accounts Receivable 31,000.00 (record the cash received) 24-Apr Accounts Receivale 10,300.00 Sales 10,300.00 (To record the sales to Bird Company) 24-Apr Cost of Goods Sold 6,200.00 Merchandise Inventory 6,200.00 (Record the cost of goods sold) 30-Apr Sales return & Allowances 11,300.00 Accounts Receivables 11,300.00 (record the sales return) 30-Apr Merchandise Inventory 6,500.00 Cost of Goods Sold 6,500.00 (record the cost of goods sold of return)
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