Question

Preparing journal entries for merchandising activities-perpetual system LO P1, P2

July 1
Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.

2
Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $500.

3
Paid $125 cash for freight charges on the purchase of July 1.

8 Sold merchandise that had cost $1,300 for $1,700 cash.
9
Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.

11
Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9.

12
Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.

16
Paid the balance due to Boden Company within the discount period.

19
Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.

21
Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on July 19.

24
Paid Leight Co. the balance due after deducting the discount.

30
Received the balance due from Art Co. for the invoice dated July 19, net of discount.

31
Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.



Prepare journal entries to record the above merchandising transactions of Blink Company, which applies the perpetual inventory system.

Answer 1

Answer:

Explanation:

1.

Dr Merchandise Inventory 6000

Cr Accounts Payable - B company 6000

2.

Dr Accounts Receievable - Ccompany 900

Cr Sales 900

Dr Cost of Goods Sold 500

Cr Merchandise inventory 500

3.

Dr Merchandise inventory 125

Cr Cash 125

8.

Dr Cash 1,700

Cr Sales 1,700

Dr Cost of goods sold 1,300

Cr Merchandise inventory 1,300

9.

Dr Merchandise inventory 2,200

Cr Accounts payable - L company 2,200

11

Dr Accounts payable - L company 200

Cr Merchandise inventory 200

12

Dr Cash (900*98%) 882

Dr Sales discount (900*2%) 18

Cr Accounts receivable - C company 900

16

Dr Accounts payable - B company 6000

Cr Cash (6000*99%) 5940

Cr Merchandise inventory 60

19

Dr Accounts receivable - A company 1200

Dr sales 1200

Dr Cost of goods sold 800

Cr Merchandise inventory 800

21

Dr Sales returns and allowances 200

Cr Accounts receivable - A company 200

24

Dr Accounts payable - L comapny 2,200

Cr Merchandise inventory (2,200*2%) 44

Cr Cash 2,156

30

Dr Cash ((1200-200)*98%) 980

Dr Sales discount ((1200-200)*2%) 20

Cr Accounts receivable - A company (1200-200) 1000

31

Dr Accounts receivable 7,000 - C company

Cr Sales 7000

Dr Cost of goods sold 4800

Cr Merchandise Inventory 4800