Question

Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop commenced business on September 1, 2019. The firm purchases merchandise on open account. The firm’s purchases, purchase returns and allowances, and cash payments on account during September 2019 follow:

9/2 - Purchased ski boots for $6,500 plus a freight charge of $300 from Colorado Ski Shop, Invoice 6672, terms n/30

9/3 – Purchased skis for $12,100 from Alaska Supply Company, Invoice 5916; terms 1/10, n/30

9/7 - Received Credit Memorandum 165 for $990 from Colorado Ski Shop for return of damaged ski boots; the boots were originally purchased September 2 on Invoice 6672.

9/11 – Purchased ski jackets for $4,900 from Cold Mountain Clothing Company, Invoice 4091, terms n/30

9/12 – Issued Check 104 to Alaska Supply Company in payment of Invoice 5916, dated September 3, less the cash discount

9/22 – Purchased ski poles for $4,660 plus a freight charge of $165 from Alaska Supply Company, Invoice 5950, terms 3/10, n/30

9/23 – Purchased ski pants for $3,150 from Swenson Ski Goods, Invoice 528, terms n/30

9/25 – Received Credit Memorandum 245 for $390 from Swenson Ski Goods for return of defective ski pants; the pants were originally purchased September 23 on Invoice 528

9/27 – Purchased ski sweaters for $3,500 plus a freight charge of $145 from Colorado Ski Shop, Invoice 6722, terms n/30.

9/30 – Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated September 2, less the return of September 7

Required:
Record the transactions in a general journal.

Analyze:
What was the amount of the cash discount on September 12?

Answer 1

Journal Entries-
		Debit	Credit
Purchased ski boots for $6,500 plus a freight charge of $300 from Colorado Ski Shop, Invoice 6672, terms n/30
2nd Sept	Purchases Account	$6500
	Colorado Ski Shop		$6500
	Freight Paid	$300
	Cash/Bank		$300
Purchased skis for $12,100 from Alaska Supply Company, Invoice 5916; terms 1/10, n/30
3rd Sept	Purchases Account	$12100
	Alaska Supply Company		$12100
Received Credit Memorandum 165 for $990 from Colorado Ski Shop for return of damaged ski boots; the boots were originally purchased September 2 on Invoice 6672.
7th Sept	Purchase Return	$990
	Purchase Account		$990
Purchased ski jackets for $4,900 from Cold Mountain Clothing Company, Invoice 4091, terms n/30
11th Sept	Purchases Account	$4900
	Cold Mountain Clothing Company		$4900
Issued Check 104 to Alaska Supply Company in payment of Invoice 5916, dated September 3, less the cash discount
12th Sept	Alaska Supply Company	$12100
	Discount on Purchase		$121
	Bank Account		$11979
Note: Discount on Purschse if paid within 10Days is 1%
=12100*10%
=$121
Purchased ski poles for $4,660 plus a freight charge of $165 from Alaska Supply Company, Invoice 5950, terms 3/10, n/30
22nd Sept	Purchases Account	$4660
	Alaska Supply Company		$4825
	Freight Paid	$165
	Cash/Bank		$165
Purchased ski pants for $3,150 from Swenson Ski Goods, Invoice 528, terms n/30
23rd Sept	Purchases Account	$3150
	Swenson Ski Goods		$3150
Received Credit Memorandum 245 for $390 from Swenson Ski Goods for return of defective ski pants; the pants were originally purchased September 23 on Invoice 528
25th Sept	Purchse Return Account	$390
	Purchase Account		$390
Purchased ski sweaters for $3,500 plus a freight charge of $145 from Colorado Ski Shop, Invoice 6722, terms n/30
27th Sept	Purchases Account	$3500
	Swenson Ski Goods		$3645
	Freight Paid	$145
	Cash/Bank		$145
Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated September 2, less the return of September 7
30th Sept	Colorado Ski Shop	$5510
	Bank Account		$5510
Note: Payment is made after deducting the Purchase return of $990.
=6500-990
=5510
Total Cash Discount Received on 12th Sept
=12100*1%
=121
Note: I have solved the question as per my understanding, please feel free to give any feedback or if there is any alternative solution to this then please suggest.