Version A Journ alize the following transactions for both the buyer of inventory

Question

Version A Journ alize the following transactions for both the buyer of inventory (Seattle Grace) the seller (Mercy West) in November using the net method. (22.5 points) Hov1 Mercy West sold merchandise on account to Seattle Grace, $12,000, terms FOB shipping point, 2/10, n/45. The cost of the goods sold was $9,900. Nov. 2 West. Seattle Grace paid freight of $275 related to November 1 purchase from Mercy Nov. 9 S eattle Grace sent payment to Mercy West for the transaction on November 1. Nov. 18 Mercy West sold merchandise on account to Seattle Grace, $18,1s0, terms FOB destination, n/eom. The cost of the goods sold was $14,975 Nov. 22 Mercy West granted a customer allowance (credit memo) to Seattle Grace for $5,000 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 Seat Grace. Nov. 30 Seattle Grace sent payment to Mercy West for the transaction on Nover 18, less the credit memo from November 22

Explanation / Answer

Books of Seattle Grace (Buyer) Date Account Title Debit Credit Nov.1 Inventory 11760 Accounts Payable 11760 (Purchase of goods from Mercy West) Nov.2 Inventory 275 Cash 275 (Freight paid on goods purchased on Nov.1) Nov.9 Accounts Payable 11760 Cash 11760 (Payment made to Mercy Seller) Nov.18 Inventory 18150 Accounts Payable 18150 (Purchase of goods from Mercy West) Nov.22 Accounts Payable 5000 Inventory 5000 (Goods returned to Mercy) Nov.30 Accounts Payable 13150 Cash 13150 (Payment made to Mercy Seller) Books of Mercy West (Seller) Date Account Title Debit Credit Nov.1 Accounts Receivable 11760 Sales 11760 (Sale of goods to Seattle Grace) Cost of goods sold 9900 Inventory 9900 (Cost of goods sold to Seattle Grace) Nov.9 Cash 11760 Accounts Receivable 11760 (Payment received from Seattle Grace) Nov.18 Accounts Receivable 18150 Sales 18150 (Sale of goods to Seattle Grace) Cost of goods sold 14975 Inventory 14975 (Cost of goods sold to Seattle Grace) Nov.22 Sales 5000 Accounts Receivable 5000 (Goods returned by Seattle Grace) Inventory 4125 Cost of goods sold 4125 (Cost of goods returned by Seattle Grace) Nov.29 Freight out 610 Cash 610 (Freight charges paid for sale to Grace) Nov.30 Cash 13150 Accounts Receivable 13150 (Payment received from Seattle Grace)

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