Sept. 1 Purchased merchandise from Jones Company for $5,000 minus a 10% trade di

Question

Sept. 1 Purchased merchandise from Jones Company for $5,000 minus a 10% trade discount 3 4 5 terms 2/10, n/30, FOB shipping point Returned $2,000 of merchandise to Jones Company because it was defective Placed an order with Brandon Company for 400 units of inventory at $4 each Paid Parkview Transport $200 for transporting the Sept. 1 purchase Received a $100 allowance from Jones Company for goods shipped on Sept. 1 that were not in the size and colour ordere 6 Paid Jones Company in full for the Sept. 1 purchase (minus any returns and allowances as well as any applicable discount for early payment) 7 Sold merchandise to A. Cannon for $2,000 (cost $1,500), terms 1/5, n/20, FOB destination 8 Paid transportation charges of S300 to Parkview Transport for transporting the merchandise sold on Sept 7h 9 A. Cannon returned $500 of merchandise (cost $100) to us because she no longer wanted the goods 10 A. Cannon was granted an allowance of S50 for slightly damaged goods 11 A. Cannon pays us in full for the sale on Sept. 7h minus any returns, allowances and 12 A physical count of the inventory on hand revealed that we actually have $4,000 of applicable discounts inventory. However, our accounting records say we have $5,000 of inventor

Explanation / Answer

JOURNAL Date Particulars Debit Credit Sep-01 Inventory $    4,500.00 Accounts Payables $      4,500.00 ($5000 x 90%) (Merchandise purchased) Sep-02 Accounts Payable $    2,000.00 Inventory $      2,000.00 (merchandise returned) Sep-03 No Entry (no entry for placing an order. Entry will pass when inventory will be purchsed) Sep-04 Inventory $        200.00 Cash $          200.00 (Being transport charges on purchase is paid) Sep-05 Accounts Payable $        100.00 Inventory $          100.00 (received allowance) Sep-06 Accounts Payable $    2,400.00 Inventory $            48.00 Cash $      2,352.00 (4500 - 2000 - 100) x 98% (Paid Jones in full settlement) Sep-07 Accounts Receivable $    2,000.00 Sales $      2,000.00 (Goods Sold) Cost of goods Sold $    1,500.00 Inventory $      1,500.00 (Inventory Adjusted) Sep-08 Transport - Out $        300.00 Cash $          300.00 (Transport charges paid) Sep-09 Sales Return $        500.00 Accounts Receivables $          500.00 (Goods retunred) Inventory $        100.00 Cost of goods sold $          100.00 Sep-10 Sales Allowance $          50.00 Accounts Receivables $            50.00 (Sales allwance granted for damage in goods) Sep-11 Cash $    1,435.50 (2000 - 500 - 50) x 99% Sales Allowance $          14.50 Accounts Receivables $      1,450.00 (Cash received from A. Cannon in full settlement) Sep-12 Cost of Goods Sold $    1,000.00 Inventory $      1,000.00 (to adjust inventory to match the physical count)

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