Prepare journal entries to record the following transactions for a retail store.
ID: 2345769 • Letter: P
Question
Prepare journal entries to record the following transactions for a retail store. Assume a perpetual inventory system. Purchased merchandise from Johns Company under the following terms : $ 5,900 price, invoice dated April, 2, credit terms of 2/15, n/60, and FOB shipping point. Paid $330 for shipping charges on the April 2 purchase. Returned the Johns Company unacceptable merchandise that had an invoice price of $900. Sent a check to Johns Company for the April 2 purchase, net of the discount and the returned merchandise. Purchased merchandise from William Corp. under the following terms : $12,500 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination. After negotiation, received from William a $3.250 allowance on the April 18 purchase. Sent check to William paying for the April 18 purchase, net of the discount and allowance.Explanation / Answer
April 2 Debit: Merchandise inventory 5900 Credit: Accounts payable 5900 April 3 Debit: Merchandise inventory 330 Credit: Cash 330 April 4 Debit: Accounts payable 900 Credit: Merchandise inventory 900 April 17 Debit: Accounts payable 5000 Credit: Cash 4900 Credit: Merchandise inventory 100 April 18 Debit: Merchandise inventory 12250 credit: Accounts payable 12250 April 21 Debit: Accounts payable 3250 Credit: Merchandise inventory 3250 April 22 Debit: Accounts payable 9000 Credit: Cash 8820 Credit: Merchanise inventory 180