alive the tollowing transactions for both the buyer of inventory (Seattle Now. I

Question

alive the tollowing transactions for both the buyer of inventory (Seattle Now. I Mercy West sold merchandise on account to Seattle Grace, $12.000. terma so Nov. z Seattle Grace paid freight of $275 related to November 1 purchase from Mercy Nov. 9 Seattle Grace sent payment to Mercy West for the transaction on November 1 Nov. 18 Mercy West sold merchandise on account to Seattle Grace, $18,150, terms Nov. 22 Mercy West granted a customer allowance (credit memo) to Seattle Grace for theselr (Mtercy West) in November using the net method. (22 5 points) shipping point 2/10, n/45. The cost of the soods sold was $9,900 West FOB destination, n/eom. The cost of the goods sold was $14,975 Ss,000 for merchandise returned from November 18 purchase. The cost of the merchandise returned was $4,125 Nov. 29 Mercy West paid freight of $610 related to November 18 sale to Seatt Grace. Nov. 30 Seattle Grace sent payment to Mercy West for the transaction on Novem 18, less the credit memo from November 22.

Explanation / Answer

Journal entries in the books of Seattle Grace: Date Accounts title and explanation debit $ Credit $ 1-Nov Inventory Dr. 12000      Accounts payabel 12000 2-Nov Inventory dr. 275      Cash Account 275 9-Nov Accounts payable Dr. 12000     Inventory (12000*2%) 240     Cash Account 11760 18-Nov Inventory Dr. 18150      Accounts payabel 18150 22-Nov Accounts payable Dr. 5000     Inventory 5000 29-Nov No entry 30-Nov Accounts payable Dr. 13150     cash Account 13150 Journal entries in the books of Mercy Wwest: Date Accounts title and explanation debit $ Credit $ 1-Nov Accounts receivable 12000     sales revenue 12000 Cost of goods sold Dr. 9900       Inventory 9900 2-Nov No entry 9-Nov Cash account 11760 Sales discount 240 Accounts receivable 12000 18-Nov Accounts receivable 18150     sales revenue 18150 Cost of goods sold Dr. 14975       Inventory 14975 22-Nov Sales return and allowance Dr. 5000     Accounts receivable 5000 Inventory Dr. 4125      Cost of goods sold 4125 29-Nov Freight out expense Dr. 610       Cash 610 30-Nov cash Account Dr. 13150       Accounts receivable 13150

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