Aug. Purchased merchandise from Arotek Company for $9,900 under credit terms of
ID: 2584287 • Letter: A
Question
Aug. Purchased merchandise from Arotek Company for $9,900 under credit terms of 1/10, n/30, FOB 1 destination, invoice dated August 1 5 Sold merchandise to Laird Corp. for $6,930 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,948. 8 Purchased merchandise from Waters Corporation for $9,200 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. The invoice showed that at Sheng's request, Waters paid the $240 shipping charges and added that amount to the bill (Hint Discounts are not applied to freight and shipping charges.) 9 Paid $220 cash for shipping charges related to the August 5 sale to Laird Corp. 10 Laird retuned merchandise from the August 5 sale that had cost Sheng $825 and been sold for $1,155 The merchandise was restored to inventory. 12 After negotiations with Waters Corporation concerning problems with the merchandise purchased on August 8, Sheng received a credit memorandum from Waters granting a price reduction of $1,389. 14 At Arotek's request, Sheng paid $330 cash for freight charges on the August 1 purchase, reducing the amount owed to Arotek. 15 Received balance due from Laird Corp. for the August 5 sale less the return on August 10. 18 Paid the amount due Waters Corporation for the August 8 purchase less the price reduction granted. 19 Sold merchandise to Tux Co. for $5,940 under credit terms of 1/10, n/30, FOB shipping point, invoice dated August 19. The merchandise had cost $4,122 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Sheng sent Tux a $990 credit memorandum to resolve the issue 29 Received Tux's cash payment for the amount due from the August 19 sale 30 Paid Arotek Company the amount due from the August 1 purchase. Prepare journal entries to record the above merchandising transactions of Sheng Company, which applies the perpetual inventory system. View transaction list Journal entry worksheet 3 4 5 6 16 Purchased merchandise from Arotek Company for $9,900 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. Note: Enter debits before credits. Date General Journal Debit Credit Aug 01Explanation / Answer
Explanation:
Sales discounts: [($6,930 – $1155) × 2%] = $116
Merchandise inventory: (1% × [$9,200 $1389]) = $78
Date General Journal Debit Credit 1-Aug Merchandise inventory 9,900 Accounts payable—Arotek 9,900 5-Aug Accounts receivable—Laird 6,930 Sales 6,930 5-Aug Cost of goods sold 4,948 Merchandise inventory 4,948 8-Aug Merchandise inventory 9,440 Accounts payable—Waters 9,440 9-Aug Delivery expense 220 Cash 220 10-Aug Sales returns and allowances 1155 Accounts receivable—Laird 1155 10-Aug Merchandise inventory 825 Cost of goods sold 825 12-Aug Accounts payable—Waters 1389 Merchandise inventory 1389 14-Aug Accounts payable—Arotek 330 Cash 330 15-Aug Cash 5,659 Sales discounts 116 Accounts receivable—Laird 5,775 18-Aug Accounts payable—Waters 8,051 Merchandise inventory 78 Cash 7,973 19-Aug Accounts receivable—Tux 5,940 Sales 5,940 19-Aug Cost of goods sold 4,122 Merchandise inventory 4,122 22-Aug Sales returns and allowances 990 Accounts receivable—Tux 990 29-Aug Cash 4,901 Sales discounts 50 Accounts receivable—Tux 4,950 30-Aug Accounts payable—Arotek 9,570 Cash 9,570Explanation:
Aug. 15Sales discounts: [($6,930 – $1155) × 2%] = $116
Collected receivable within 2% discount period. Aug. 18Merchandise inventory: (1% × [$9,200 $1389]) = $78
Cash: ([100% 1%] × [$9,200 $1389]) + $240 shipping = $7973 Aug. 29 Sales discounts: ($5,940 $990) × 1% = $50 Aug. 30 Accounts payable—Arotek: ($9,900 $330) = $9,570Related Questions
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