Question

he following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 3...

he following merchandise transactions occurred in December. Both companies use a perpetual inventory system.

Dec. 3 Swifty Ltd. sold goods to Blue Spruce Corp. for $81,700, terms n/15, FOB shipping point. The inventory had cost Swifty $43,500. Pictou’s management expected a return rate of 3% based on prior experience.
7 Shipping costs of $1,140 were paid by the appropriate company.
8 Blue Spruce returned unwanted merchandise to Swifty. The returned merchandise has a sales price of $2,520, and a cost of $1,340. It was restored to inventory.

dec 11 Swifty received the balance due from Blue Spruce.

Record the above transactions in the books of Blue Spruce. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to the nearest whole dollar, e.g. 5,275.)

Homework Answers

Answer #1

Ans: Journal Entries

Date Account title and explanation Debit($) Credit($)
Dec 3 Merchandise Inventory 81,700
Accounts payable-Swifty Ltd 81,700
{ to record purchase}
Dec 7 Merchandise Inventory 1,140
Cash 1,140
{ to record freight paid}
Dec 8 Accounts payable-Swifty Ltd 2,520
Merchandise Inventory 2,520
{ to record Purchase return}
Dec 11 Accounts Payable-Swifty Ltd (81,700-2,520) 79,180
Cash 79,180
{ to record Amount paid}
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