Question

Exercise 5-05 On June 10, Marin Company purchased $7,300 of merchandise from Cullumber Company, on account, terms 3/10, n/30. Marin pays the freight costs of $360 on June 11. Goods totaling $500 are returned to Cullumber for credit on June 12. On June 19, Marin Company pays Cullumber Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Prepare separate entries for each transaction on the books of Marin Company. (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.)

Answer 1

Journal entries in the books of Marin Company-

Date	Accounts	Debit	Credit	Calculation
10-Jun	Inventory A/c---Dr	7,081.00		7300*(1-3%)
	To Accounts Payable A/c		7,081.00
	(Being goods purchased from Cullumber company on 3/10, net 30 terms)
11-Jun	Inventory A/c---Dr	300.00
	To Cash A/c		300.00
	(Being freight paid)
12-Jun	Accounts Payable A/c---Dr	485.00		500*(1-3%)
	To Inventory A/c		485.00
	(Being goods returned)
19-Jun	Accounts Payable A/c---Dr	6,596.00
	To Cash A/c		6,596.00
	(Being cash paid to Cullumber Company)