Question

Brief Exercise 5-05 a-c Prepare the journal entries to record the following transactions on Bramble Company’s books under a perpetual inventory system.

On March 2, Cullumber Company sold $835,000 of merchandise on account to Bramble Company, terms 2/10, n/30. The cost of the merchandise sold was $585,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

On March 6, Bramble Company returned $83,500 of the merchandise purchased on March 2. The cost of the returned merchandise was $56,800. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

Answer 1

In the books of Bramble company:

Date	Account Titles and Explanation	Debit	Credit
March.02	Inventory	$      835,000
	Account Payable - Cullumber company		$ 835,000
	(To record inventory purchased on account)
March .06	Account Payable - Cullumber company	$         83,500
	Inventory		$   83,500
	(To record inventory returned and received credit)
March.12	Account Payable - Cullumber company [835000-83500]	$      751,500
	Inventory ( 751500*2%)		$   15,030
	Cash		$ 736,470
	( To record account payable paid)