Assume Anderson’s General Store bought, on credit, a truckload of merchandise fr

Question

Assume Anderson’s General Store bought, on credit, a truckload of merchandise from American Wholesaling costing $39,000. If the company was charged $810 in transportation cost by National Trucking, immediately returned goods to American Wholesaling costing $2,800, and then took advantage of American Wholesaling’s 3/10, n/30 purchase discount.

Prepare journal entries to record the inventory transactions, assuming Anderson’s uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1. Record the inventory purchased of $39,000 on account.

2. Record transportation costs of $810 incurred, but not yet paid for the inventory shipment.

3. Record part of the inventory returned of $2,800.

4. Record the payment within the discount period to American Wholesaling for the inventory.

Assume Anderson’s General Store bought, on credit, a truckload of merchandise from American Wholesaling costing $39,000. If the company was charged $810 in transportation cost by National Trucking, immediately returned goods to American Wholesaling costing $2,800, and then took advantage of American Wholesaling’s 3/10, n/30 purchase discount.

Explanation / Answer

The following are the required journal entries in the books of Anderson's:

Sno Description Debit Credit 1 Merchandise inventory a/c $39,000 ...........To accounts payable american whole saling- a/c $39,000 (being merchandise purchased on credit from american whole salling) 2 Merchandise inventory a/c $810 ...............To Accounts payable -National Trucking a/c $810 (being amount payable for transportation of merchandise) 3 Accounts payable - American wholesalling a/c $2,800 .................To Merchandise inventory a/c $2,800 (being merchandise inventory returned) 4 Accounts payable - American wholesalling a/c..(39,000-2800) $36,200 ................To Merchandise inventory a/c (36,200*3%) $1,086 ...............To Cash a/c...(36,200 * 97%) $35,144 (being payment made to American wholesalling within discount period and availing a discount of 3% on amount due ($39,000 - 2,800)=>$36,200)

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