Question

Presented here are selected transactions for the Leiss Company during April. Leiss uses the perpetual inventory system.

April
1 Sold merchandise to Mann Company for $4,000, terms 2/10, n/30. The merchandise sold had a cost of $2,500.
2 Purchased merchandise from Wild Corporation for $8,000, terms 1/10, n/30.
4 Purchased merchandise from Ryan Company for $1,000, n/30.
10 Received payment from Mann Company for purchase of April 1 less appropriate discount.
11 Paid Wild Corporation for April 2 purchase.

Journalize the april transactions for Leiss Company.

Answer 1

Answer and Explanation:

The journal entries are shown below:

On April 1

Account receivable Dr $4,000

        To Sales revenue $4,000

(Being the sale of the merchandise is recorded)

For recording this we debited the account receivable as it increased the assets and credited the sales revenue as it also increased the sales

Cost of goods sold Dr $2,500

           To  Merchandise inventory $2,500

(Being the cost of goods sold is recorded)

For recording this we debited the cost of goods sold as it increased expenses and credited the inventory as it reduced the assets

On April 2

Merchandise Inventory Dr $8,000

     To Account payable $8,000

(Being the purchase of merchandise is recorded)

For recording this we debited the inventory as it increased the assets and credited the account payable as it also increased the liabilities

On April 4

Merchandise Inventory Dr $1,000

     To Account payable $1,000

(Being the purchase of merchandise is recorded)

For recording this we debited the inventory as it increased the assets and credited the account payable as it also increased the liabilities

On April 10

Cash $3,920

Sales discount $80   ($4,000 × 2%)

          To Account receivable $4,000

(Being the cash receipts is recorded)

For recording this we debited the cash as it increased the assets and credited the account receivable as it reduced the assets plus the discount is debited to sales discount

On April 11

Account payable $8,000

         To Merchandise inventory $80 ($8,000 × 1%)

         To Cash $7,920

(Being the cash paid is recorded)

For recording this we debited the account payable as it reduced the liabilities and credited the cash as it reduced the assets plus the discount is credited to merchandise inventory