Cornerstone Exercise 6-20 (Algorithmic)
Recording Purchase Transactions
Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April:
Required:
Prepare the journal entry to record the April 1 purchase (ignore any freight charges) of merchandise by Mathis Company.
April 1 | |||
(Purchased inventory on account) |
Prepare the journal entry to record the payment of freight on April 1.
April 1 | |||
(Recorded the payment of freight charges) |
Prepare the journal entry to record the April 8 return of merchandise.
April 8 | |||
(Returned merchandise) |
Prepare the journal entry to record the April 10 payment to Reece Company. If an amount box does not require an entry, leave it blank.
April 10 | |||
(Paid accounts payable within discount period) |
Answer | ||||
Date | Account Title | Debit | Credit | |
Apr-01 |
Inventory | $3,500 | ||
Accounts Payable | $3,500 | |||
(Purchased inventory on account) | ||||
Apr-01 | Inventory | $ 100 | ||
Cash | $ 100 | |||
(Recorded the payment of freight charges) | ||||
Apr-06 | Accounts Payable | $1,000 | ||
Inventory | $1,000 | |||
(Returned merchandise) | ||||
Apr-10 | Accounts Payable | $2,500 | 3500-1000 | |
Cash | $2,450 | 2500-50 | ||
Inventory | $ 50 | 2500*2% | ||
(Paid accounts payable within discount period) |
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