On November 4, 2018, Cane Company sold merchandise inventory on account to Tram

Question

On November 4, 2018, Cane Company sold merchandise inventory on account to Tram Wholesalers, $15,500, that cost $5,800. Terms 1/10, n/30. On November 5, 2018, Tram Wholesalers paid shipping of $45. Tram Wholesalers paid the balance to Cane Company on November 13, 2018. (Assume both companies use a perpetual inventory system and that sales are recorded at the net amount.) Read the requirements. Requirement 1. Journalize Tram Wholesaler's November transactions. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Nov. 4: Purchased merchandise inventory on account from Cane Company for$15,500, terms 1 / 10, n/30. Date Accounts Debit Credit Nov. 4 Requirements 1. 2. Journalize Tram Wholesaler's November transactions. Journalize Cane Company's November transactions. Print Done

Explanation / Answer

1) Journal entry Tram Wholesaler's

2) Cane company's journal entry :

Date account and explanation debit credit Nov 4 Merchandise inventory 15500 Account payable 15500 (To record purchase) Nov 5 Merchandise inventory 45 Cash 45 (To record shipping Charges) Nov 13 Account payable 15500 Cash (15500*99%) 15345   Merchandise inventory 155 (To record amount paid)

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