Jul. 1 Purchased merchandise from Boden Company for $6,000 under credit terms of

Question

Jul. 1 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. Jul. 2 Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $500. Jul. 3 Paid $125 cash for freight charges on the purchase of July 1. Jul. 8 Sold merchandise that had cost $1,300 for $1,700 cash. Jul. 9 Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. Jul. 11 Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9. Jul. 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. Jul. 16 Paid the balance due to Boden Company within the discount period. Jul. 19 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. Jul. 21 Issued a $100 credit memorandum to Art Co. for an allowance on goods sold on July 19. Jul. 24 Paid Leight Co. the balance due, net of discount. Jul. 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount. Jul. 31 Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Increase (decrease) to income Impact on income July 1) Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1 July 2) Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. 000: Increases net income 000: Decreases net income 000: No impact on income July 2) The cost of the merchandise sold to Creek Co. was $500 July 3) Paid $125 cash for freight charges on the purchase of July 1 July 8) Sold merchandise for $1,700 cash. July 8) The cost of the merchandise sold was $1,300 July 9) Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9 July 11) Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 12) Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. July 16) Paid the balance due to Boden Company within the discount period July 19) Sold merchandise to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July July 19) The cost of the merchandise sold to Art Co. was $800 July 21) Issued a $100 credit memorandum to Art Co. for an allowance on goods sold on July 19 July 24) Paid Leight Co. the balance due, net of discount. July 30) Received the balance due from Art Co. for the invoice dated July 19, net of discount. July 31) Sold merchandise to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31 July 31) The cost of the merchandise sold to Creek Co. was $4,800 Total gross profit

Explanation / Answer

Please find below answer of your question. If this helped, please hit LIKE button. GIving Journal entry also to understand the impact:

Jul. 1 - Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.

Merchandise Inventory -$6,000 debit

Jul. 2 - Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2.

Accounts Receivable -$900 debit

Jul. 2 - The merchandise had cost $500 sold to creek

Jul. 3 - Paid $125 cash for freight charges on the purchase of July 1.

Merchandise Inventory -$125 debit

Jul. 8 - Sold merchandise for $1,700 cash.

Cash -$1,700 debit

Jul. 8 - Sold merchandise that had cost $1,300

Jul. 9 - Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.

Merchandise Inventory -$2,200 debit

Jul. 11 - Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9.

Accounts Payable -$200 debit

Jul. 12 - Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.

Cash -$882 debit

Jul. 16 - Paid the balance due to Boden Company within the discount period.

Accounts Payable -$6,000 debit

Jul. 19 - Sold merchandise for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.

Accounts Receivable -$1,200 debit

Jul. 19 - cost of merchandise sold to art co was $800

Jul. 21 - Issued a $100 credit memorandum to Art Co. for an allowance on goods sold on July 19.

Sales Returns and allowances -$100 debit

Jul. 24 - Paid Leight Co. the balance due after deducting the discount.

Accounts Payable -$2,000

Jul. 30 - Received the balance due from Art Co. for the invoice dated July 19, net of discount.

Cash -$980 debit

Jul. 31 - Sold merchandise for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Accounts receivable -$7,000 debit

Jul. 31 - cost of merchandise sold t Creek $4,800

Gross Profit=10800-7538=3262

Impact on Income Amount of impact

Jul. 1 - Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.

No Impact

Merchandise Inventory -$6,000 debit

Accounts Payable -$6,000 credit

Jul. 2 - Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2.

Increase 900

Accounts Receivable -$900 debit

Sales .-$900 credit

Jul. 2 - The merchandise had cost $500 sold to creek

Decrease 500 Costs of Goods Sold -$500 debit Merchandise Inventory -$500 credit

Jul. 3 - Paid $125 cash for freight charges on the purchase of July 1.

No Impact

Merchandise Inventory -$125 debit

Cash -$125 credit

Jul. 8 - Sold merchandise for $1,700 cash.

Increase 1700

Cash -$1,700 debit

Sales -$1,700 credit

Jul. 8 - Sold merchandise that had cost $1,300

Decrease 1300 Cost of Goods Sold -$1,300 debit Merchandise Inventory -$1,300 credit

Jul. 9 - Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.

No Impact

Merchandise Inventory -$2,200 debit

Accounts Payable -$2,200 credit

Jul. 11 - Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9.

No Impact

Accounts Payable -$200 debit

Merchandise Inventory -$200

Jul. 12 - Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.

Decrease-Discount 18

Cash -$882 debit

Sales Discounts-$18 (900x.02=$18 sales disc.) debit Accounts Receivable - $900 (882+18)

Jul. 16 - Paid the balance due to Boden Company within the discount period.

No Impact

Accounts Payable -$6,000 debit

Merchandise Inventory-$60 (6,000x.02)credit Cash -$5,940 (6,000-60) credit

Jul. 19 - Sold merchandise for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.

Increase 1200

Accounts Receivable -$1,200 debit

Sales -$1,200 credit

Jul. 19 - cost of merchandise sold to art co was $800

Decrease 800 Cost of Goods Sold -$800 debit Merchandise Inventory -$800 credit

Jul. 21 - Issued a $100 credit memorandum to Art Co. for an allowance on goods sold on July 19.

Decrease 100

Sales Returns and allowances -$100 debit

Accounts Receivable -$100 credit

Jul. 24 - Paid Leight Co. the balance due after deducting the discount.

No Impact

Accounts Payable -$2,000

Merchandise Inventory -$40 Cash -$1,960 (2,000-40)

Jul. 30 - Received the balance due from Art Co. for the invoice dated July 19, net of discount.

Decrease-Sales Discount 20

Cash -$980 debit

Sales discounts -$20 (1,000x.02=discount) debit Accounts receivable -$1,000

Jul. 31 - Sold merchandise for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Increase 7000

Accounts receivable -$7,000 debit

Sales -$7,000 credit

Jul. 31 - cost of merchandise sold t Creek $4,800

Decrease 4800 Cost of Goods Sold -$4,800 debit Merchandise Inventory -$4,800 credit

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