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During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $7,900 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $3,000 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,950 with terms 2/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. Required: Prepare journal entries to record the transactions, assuming Ace records discounts using the net method in a perpetual inventory system. Forfeited discounts are charged to Other Operating Expenses

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mltn1980

Answer:

  • June 3 Purchased goods for $7,900 from Diamond Inc. with terms 2/10, n/30.              

Merchandise            $7,900  Debit    

Accounts Payable   $7,900  Credit    

     

  • 5 Returned goods costing $3,000 to Diamond Inc. for credit on account.            

Accounts Payable   $3,000  Debit    

Merchandise    $3,000  Credit    

     

  • 6 Purchased goods from Club Corp. for $1,950 with terms 2/10, n/30.          

Merchandise            $1,950  Debit    

Accounts Payable   $1,950  Credit    

     

  • 11 Paid the balance owed to Diamond Inc.          

Accounts Payable   $4,900  Debit    

Merchandise    $98   Credit    

Cash                 $4,802  Credit    

     

  • 22 Paid Club Corp. in full.            

Accounts Payable  $1.950  Debit    

Cash                     $1.950  Credit    

Explanation:

First recorded the journal entry of the purchased merchandise.

  • June 3 Purchased goods for $7,900 from Diamond Inc. with terms 2/10, n/30.              

Merchandise            $7,900  Debit    

Accounts Payable   $7,900  Credit    

When merchandise is returned, we make the opposite entry      

  • 5 Returned goods costing $3,000 to Diamond Inc. for credit on account.            

Accounts Payable   $3,000  Debit    

Merchandise    $3,000  Credit    

 

It's recorded again the journal entry of the purchased merchandise.  

  • 6 Purchased goods from Club Corp. for $1,950 with terms 2/10, n/30.          

Merchandise            $1,950  Debit    

Accounts Payable   $1,950  Credit    

When the balance is paid it's necessary to register de discount availabe becuase the payment was within 10 days, 2/10.      

  • 11 Paid the balance owed to Diamond Inc.          

Accounts Payable   $4,900  Debit    

Merchandise    $98   Credit    

Cash                 $4,802  Credit    

In the case of Club Corp the paid is in full because it's out of the discount period.

  • 22 Paid Club Corp. in full.            

Accounts Payable  $1.950  Debit    

Cash                     $1.950  Credit  

abiolataiwo2015

The appropriate journal entries to record the given transactions are: Debit Merchandise  $7,900; Credit Accounts Payable   $7,900.  

Journal entries

June 3  

Debit Merchandise            $7,900  

Credit Accounts Payable   $7,900  

June 5      

Debit Accounts Payable   $3,000  

Credit Merchandise    $3,000

June 6

Debit Merchandise            $1,950

Credit Accounts Payable   $1,950

June 11

Debit Accounts Payable   $4,900

Credit Merchandise    $98  

(2%×$4900)

Credit Cash                 $4,802

(98%×$4900)

   

June 22  

Debit Accounts Payable  $1,950

Credit Cash                     $1,950

Inconclusion the appropriate journal entries to record the given transactions are: Debit Merchandise  $7,900; Credit Accounts Payable   $7,900.

Learn more about journal entries here:https://brainly.com/question/14279491

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