Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpe

Question

Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System The following selected transactions were completed during August between Summit Company and Beartooth Co.: Aug. 1. Summit Company sold merchandise on account to Beartooth Co., $52,550, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $26,380 2. Summit Company paid freight of $1,055 for delivery of merchandise sold to Beartooth Co. on August 1 5. Summit Company sold merchandise on account to Beartooth Co., $71,360, terms FOB shipping point, n/eom. The cost of the goods sold was $43,280 9. Beartooth Co. paid freight of $2,160 on August 5 purchase from Summit Company. 15, Summit Company sold merchandise on account to Beartooth Co., $62,700, terms FOB shipping point, 1/10, n/30. Summit paid freight of SI,565, which was added to the invoice. The cost of the goods sold was $37,180 16. Beartooth Co. paid Summit Company for purchase of August 1. 25. Beartooth Co. paid Summit Company on account for purchase of August 15. 31. Beartooth Co. paid Summit Company on account for purchase of August 5. Required: 1. Journalize the August transactions for Beartooth Co. (the buyer)

Explanation / Answer

Date Accounting titles & explanations debit credit 1-Aug merchandise iventory 52,550 accounts payable 52,550 2-Aug No entry 5-Aug merchandise iventory 71,360 accounts payable 71,360 9-Aug merchandise inventory 2,160 cash 2,160 15-Aug merchandise iventory (62700+1565) 64265 accounts payable 64,265 16-Aug Accounts payable 52,550 cash 52,550 25-Aug Accounts payable 64,265 merchandise inventory (62700*1%) 627 cash (62700*99%+1565) 63638 31-Aug Accounts payable 71,360 cash 71,360

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