Exercise 5-1 This information relates to Blossom Co.. (a) Prepare the journal en

Question

Exercise 5-1

This information relates to Blossom Co..

(a)
Prepare the journal entries to record the transactions listed above on Blossom Co.’s books. Blossom Co. uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

(b)
Assume that Blossom Co. paid the balance due to Sunland Company on May 4 instead of April 15. Prepare the journal entry to record this payment. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

1. On April 5, purchased merchandise from Sunland Company for $28,800, terms 4/10, n/30. 2. On April 6, paid freight costs of $620 on merchandise purchased from Sunland Company. 3. On April 7, purchased equipment on account for $34,200. 4. On April 8, returned $3,500 of April 5 merchandise to Sunland Company. 5. On April 15, paid the amount due to Sunland Company in full.

Explanation / Answer

Journal Entries

Note : If the payment is made on May 4 than Blossom Co cannot avail any discount.

Date Accounts Titles & Explanation Debit ($) Credit ($) Answer Part a April 5 Inventory 28,800 Accounts Payable 28,800 (To record purchased merchandise ) April 6 Inventory 620 Cash 620 (To record freight costs paid) April 7 Equipment 34,200 Accounts Payable 34,200 (To record purchased equipment on account) April 8 Accounts Payable 3,500 Inventory 3,500 (To record purchase returns) April 15 Accounts Payable 28,180 Discount [( $28,800 - $620) * 4 %] 1,127.20 Cash 28,180 Inventory 1,127.20 (To record payment in full to Sunland Company ) Answer part b May 4 Accounts Payable 28,180 Cash 28,180 (To record payment in full to Sunland Company )

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