Question

Question:
Marshall Supplies is a janitorial supply store that uses perpetual inventory.

On July 4, Marshall purchases inventory from Tidy Wholesalers for $8,500 with terms 1/10, n/30.

On July 5, Marshall pays Express Transfer $45 for freight in on the July 4 order.

On July 7, Marshall buys an additional $11,985 in inventory from Tidy Wholesalers with terms 1/10, n/30.

On July 13, Marshall pays Tidy Wholesalers the balance due on both invoices.


Required:

Journalize the above transactions.

Answer 1

Answer:

Explanation:

The journal entries are shown below:

1. Purchase A/c Dr $8,500

       To Accounts payable A/c $8,500

(Being purchase of inventory is made on credit)

2. Freight-in A/c Dr $45

         To Cash A/c $45

(Being freight charges is paid for cash)

3. Purchase A/c Dr $11,985

       To Accounts payable A/c $11,985

(Being purchase of inventory is made on credit)

4. Account payable A/c Dr $20,485     ($8,500 + $11985)

         To Cash A/c $20,280.15

         To Purchase discount A/c 204.85   ($20,485 × 1 %)

(Being the payment is recorded)