Question

Brief Exercise 5-05 Prepare the journal entries to record the following transactions on Wildhorse Company’s books...

Brief Exercise 5-05

Prepare the journal entries to record the following transactions on Wildhorse Company’s books using 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.)

(a) On March 2, Windsor Company sold $947,600 of merchandise to Wildhorse Company on account, terms 3/10, n/30. The cost of the merchandise sold was $534,200.
(b) On March 6, Wildhorse Company returned $105,700 of the merchandise purchased on March 2. The cost of the merchandise returned was $68,600.
(c) On March 12, Windsor Company received the balance due from Wildhorse Company.
No.

Date

Account Titles and Explanation

Debit

Credit

(a)

choose a transaction date

March 2March 6March 12

enter an account title enter a debit amount enter a credit amount
enter an account title enter a debit amount enter a credit amount

(b)

choose a transaction date

March 2March 6March 12

enter an account title enter a debit amount enter a credit amount
enter an account title enter a debit amount enter a credit amount

(c)

choose a transaction date

March 2March 6March 12

enter an account title enter a debit amount enter a credit amount
enter an account title enter a debit amount enter a credit amount
enter an account title enter a debit amount enter a credit amount
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Homework Answers

Answer #1

Answer:

Date Description Debit ($) Credit ($)
Mar 2 Merchandise Inventory $947,600
Accounts Payable (Windsor Co.) $947,600
. . . .
Mar 6 Accounts Payable (Windsor Co.) $105,700
Merchandise Inventory $105,700
Mar 12 Accounts Payable (Windsor Co.) $841,900
Merchandise Inventory $25,257
Cash $816,643

Calculations:

For Mar 12 entry Total Payment due to Windsor = $947,600 - $105,700 = $841,900

Cash Discount = 3% × $841,900 = $25,257

Hence, cash to be paid = $841,900- $25,257 = $816,643

.

Please comment in case of any issue and I will be happy to rectify it.

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