Roley Corporation uses a periodic inventory system and the gross method of accou
ID: 2372331 • Letter: R
Question
Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $82,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of $1,510. On July 3, Roley returned damaged goods and received credit of $8,200. On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley. (For multiple debit/credit entries, list amounts from largest to smallest, e.g. 10, 8, 6.)
July 1
July 3
July 10
Explanation / Answer
July 1:
DR: Purchases $82,000
CR: Accounts payable 82,000
July 3:
DR: Accounts payable $8,200
CR: Purchase returns 8,200
July 10:
DR: Accounts Payable $73,800
CR: Cash 72,324
CR: Purchase discounts 1,476
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