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The following selected transactions were completed by Capers Company during Octo

ID: 2600728 • Letter: T

Question

The following selected transactions were completed by Capers Company during October of the current year:

Journalize the entries to record the transactions of Capers Company for October. Refer to the Chart of Accounts for exact wording of account titles.

Journalize the entries to record the transactions of Capers Company for October. Refer to the Chart of Accounts for exact wording of account titles.

How does grading work?

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 281/301

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Points:

56.01 / 60

Check My Work

Journalize these transactions from the buyer's perspective. Discounts are taken on the amount owed to the seller, except for any freight costs.

Oct. 1, 3, 4, 19 & 20: Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Under FOB shipping point, freight is paid by the buyer, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.

Oct. 6: Any discounts or returns are recorded directly by the buyer who debits Accounts Payable and credits Merchandise Inventory, basically reversing what was done in recording the purchase.

Oct. 13: Since the invoice is paid within the discount period, the cash paid on account is the difference between the invoice and the discount.

Oct. 14: Returns are not eligible for discounts. Since the invoice is paid within the discount period, Accounts Payable is debited for the balance in the account. The cash paid on account is the difference between the invoice and the discount, less the returns.

Oct. 19: Freight expense increases the cost of the merchandise. However, freight is typically prepaid in cash.

Oct. 30: Since the invoice is paid within the discount period, the cash paid on account is the difference between the invoice and the discount.

Oct. 31 (UK Imports & Veggie): Since no discounts are allowed, no discounts are recorded. The cash paid on account in each case is equal to the invoice.

The following selected transactions were completed by Capers Company during October of the current year:

Journalize the entries to record the transactions of Capers Company for October. Refer to the Chart of Accounts for exact wording of account titles.

Journalize the entries to record the transactions of Capers Company for October. Refer to the Chart of Accounts for exact wording of account titles.

How does grading work?

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 281/301

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Points:

56.01 / 60

Check My Work

Journalize these transactions from the buyer's perspective. Discounts are taken on the amount owed to the seller, except for any freight costs.

Oct. 1, 3, 4, 19 & 20: Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Under FOB shipping point, freight is paid by the buyer, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.

Oct. 6: Any discounts or returns are recorded directly by the buyer who debits Accounts Payable and credits Merchandise Inventory, basically reversing what was done in recording the purchase.

Oct. 13: Since the invoice is paid within the discount period, the cash paid on account is the difference between the invoice and the discount.

Oct. 14: Returns are not eligible for discounts. Since the invoice is paid within the discount period, Accounts Payable is debited for the balance in the account. The cash paid on account is the difference between the invoice and the discount, less the returns.

Oct. 19: Freight expense increases the cost of the merchandise. However, freight is typically prepaid in cash.

Oct. 30: Since the invoice is paid within the discount period, the cash paid on account is the difference between the invoice and the discount.

Oct. 31 (UK Imports & Veggie): Since no discounts are allowed, no discounts are recorded. The cash paid on account in each case is equal to the invoice.

Oct. 1 Purchased merchandise from UK Imports Co., $14,448, terms FOB destination, n/30. 3 Purchased merchandise from Hoagie Co., $9,950, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $220 was added to the invoice. 4 Purchased merchandise from Taco Co., $13,650, terms FOB destination, 2/10, n/30. 6 Issued debit memo to Taco Co. for $4,550 of merchandise returned from purchase on October 4. 13 Paid Hoagie Co. for invoice of October 3. 14 Paid Taco Co. for invoice of October 4, less debit memo of October 6. 19 Purchased merchandise from Veggie Co., $27,300, terms FOB shipping point, n/eom. 19 Paid freight of $400 on October 19 purchase from Veggie Co. 20 Purchased merchandise from Caesar Salad Co., $22,000, terms FOB destination, 1/10, n/30. 30 Paid Caesar Salad Co. for invoice of October 20. 31 Paid UK Imports Co. for invoice of October 1. 31 Paid Veggie Co. for invoice of October 19.

Explanation / Answer

All the working details given by you are correct.

CAPERS COMPANY General journal for the month of October current year Date Account title Debit Credit Asset = Liability + Equity Oct.1 Merchandise Inventory 14448 14448 Accounts Payable 14448 14448 (To record purchase of merchandise from UK Imports Co.) Oct.3 Merchandise Inventory 9950 9950 Accounts Payable 9950 9950 (To record purchase of merchandise from Hogie Co.) Oct.4 Merchandise Inventory 13650 13650 Accounts Payable 13650 13650 (To record purchase of merchandise from Taco Co.) Oct.6 Accounts Payable 4550 -4550 Merchandise Inventory 4550 -4550 (To record return of goods to Taaco. Co.) Oct.13 Accounts Payable 9950 -9950 Cash 9751 -9751 Purchase discount 199 199 (To record paymet to Hogie Co.) Oct.14 Accounts Payable 9100 -9100 Cash 8918 -8918 Purchase discount 182 182 (To record paymet to Taco Co. ) Oct.19 Merchandise Inventory 27300 27300 Accounts Payable 27300 27300 (To record purchase of merchandise from Veggie Co.) Oct.19 Merchandise Inventory 400 400 Cash 400 -400 (To record payment of freight on Veggie Co.purchase) Oct.20 Merchandise Inventory 22000 22000 Accounts Payable 22000 22000 (To record purchase of merchandise from Ceasar Salad Co.) Oct.30 Accounts Payable 22000 -22000 Cash 21780 -21780 Purchase discount 220 220 (To record payment to Ceasar salad Co.) Oct.31 Accounts Payable 14448 -14448 Cash 14448 -14448 (To record payment to UK Imports Co.) Oct.31 Accounts Payable 27300 -27300 Cash 27300 -27300 (To record payment to Veggie Co.) 175096 175096 601 = 0 + 601
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