Question

Cost of Merchandise Sold

Based on the following data, determine the cost of merchandise sold for November:

1. Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System

   The following selected transactions were completed during April between Swan Company and Bird Company:
   

   Apr.2.	Swan Company sold merchandise on account to Bird Company, $32,000, terms FOB shipping point, 2/10, n/30. Swan Company paid freight of $330, which was added to the invoice. The cost of the merchandise sold was $19,200.
   8.	Swan Company sold merchandise on account to Bird Company, $49,500, terms FOB destination, 1/15, n/30. The cost of the merchandise sold was $29,700.
   8.	Swan Company paid freight of $710 for delivery of merchandise sold to Bird Company on April 8.
   12.	Bird Company paid Swan Company for purchase of April 2.
   18.	Swan Company paid Bird Company a refund of $2,000 for defective merchandise in the April 2 purchase. Bird Company agreed to keep the merchandise.
   23.	Bird Company paid Swan Company for purchase of April 8.
   24.	Swan Company sold merchandise on account to Bird Company, $67,350, terms FOB shipping point, n/45. The cost of the merchandise sold was $40,400.
   26.	Bird Company paid freight of $875 on April 24 purchase from Swan Company.
   30.	Swan Company granted a customer allowance (credit memo) to Bird Company for $11,300 for merchandise that was returned from the August 24 purchase. The cost of the merchandise returned was $6,500.

   Required:

   1. Journalize the April transactions for Bird Company (the buyer).

   Date	Account	Debit	Credit
   Apr. 2

   Date	Account	Debit	Credit
   Apr. 8

   Date	Account	Debit	Credit
   Apr. 12

   Date	Account	Debit	Credit
   Apr. 18

   Date	Account	Debit	Credit
   Apr. 23

   Date	Account	Debit	Credit
   Apr. 24

   Date	Account	Debit	Credit
   Apr. 26

   Date	Account	Debit	Credit
   Apr. 30

   2. Journalize the April transactions for Swan Company (the seller).

   Date	Account	Debit	Credit
   Apr. 2-sale

   Date	Account	Debit	Credit
   Apr. 2-freight

   Date	Account	Debit	Credit
   Apr. 2-cost

   Date	Account	Debit	Credit
   Apr. 8-sale

   Date	Account	Debit	Credit
   Apr. 8-cost

   Date	Account	Debit	Credit
   Apr. 8-freight

   Date	Account	Debit	Credit
   Apr. 12

   Date	Account	Debit	Credit
   Apr. 18

   Date	Account	Debit	Credit
   Apr. 23

   Date	Account	Debit	Credit
   Apr. 24-sale

   Date	Account	Debit	Credit
   Apr. 24-cost

   Date	Account	Debit	Credit
   Apr. 30

   Date	Account	Debit	Credit
   Apr. 30

Check My Work

$

Answer 1

In books of Swan Co
		Amount in $
Date	Account	Debit	Credit
Apr-02	Bird Co. A/c	32330
	Sale A/c		32000
	Freight Income A/c		330
Apr-02	Cost of Merchandise A/c	19200
	Freight A/c	330
	Bank A/c		19530
Apr-08	Bird Co. A/c	50210
	Sale A/c		49500
	Freight Income A/c		710
Apr-08	Cost of Merchandise A/c	29700
	Freight A/c	710
	Bank A/c		30410
Apr-12	Bank A/c	32330
	Bird Co. A/c		32330
Apr-18	Cost of Merchandise A/c	2000
	Bird Co A/c		2000
Apr-18	Bird Co A/c	2000
	Bank A/c		2000
Apr-23	Bank A/c	50210
	Bird Co. A/c		50210
Apr-24	Bird Co. A/c	67350
	Sale A/c		67350
Apr-24	Cost of Merchandise A/c	40400
	Bank A/c		40400
Apr-26	Bank A/C	875
	Freight Income A/c		875
Apr-30	Customer Allowance A/c	11300
	Bird Co. A/c		11300

In books of Bird Co
		Amount in $
Date	Account	Debit	Credit
Apr-02	Purchase A/c	32000
	Frieght Expense A/c	330
	Swan Co A/c		32330
Apr-08	Purchase A/c	49500
	Frieght Expense A/c	710
	Swan Co A/c		50210
Apr-12	Swan Co A/c	32330
	Bank A/c		32330
Apr-18	Swan Co A/c	2000
	Purchase A/c		2000
Apr-18	Bank A/c	2000
	Swan Co A/c		2000
Apr-23	Swan Co A/c	50210
	Bank A/c		50210
Apr-24	Purchase A/c	67350
	Swan Co A/c		67350
Apr-26	Frieght Expense A/c	875
	Bank A/c		875
Apr-30	Swan Co A/c	11300
	Supplier Allowance		11300