Purchased merchandise from Blue Company under the following terms: $4,600 price,
ID: 2364528 • Letter: P
Question
Purchased merchandise from Blue Company under the following terms: $4,600 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point.
Paid $258 for shipping charges on the April 2 purchase.
Returned to Blue Company unacceptable merchandise that had an invoice price of $500.
Sent a check to Blue Company for the April 2 purchase, net of the discount and the returned merchandise.
Purchased merchandise from Fox Corp. under the following terms: $9,650 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination.
After negotiations, received from Fox a $2,702 allowance on the April 18 purchase.
Sent check to Fox paying for the April 18 purchase, net of the discount and allowance.
Explanation / Answer
Preparation of journal entries under perpetual inventory system: April 2, Inventory (A+) $4,600 Accounts payable $4,600 (Purchased merchandise on accoounts) April 15, Accounts payable $4,600 Cash($4,600*0.98) $90 Inventory($4,600*0.02) $4,508 (Paid with in discount period) April 2, Inventory $258 Cash $258 (Paid a shipping charges). Accounts payable $500 Inventory $500 (Returned inventory to seller). Journal entires for Fox corp: April 18, Inventory $9,650 Accounts payable $9,650 (Purchase merchadise on account) April 20 Acconts payable $9,650 Cash(9,650*0.98) $9,457 Inventory(9,650*0.02) $193 (Paid with in discount period) April 18, Accounts payable $2,702 Inventoty $2,702Related Questions
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