Exercise 5-4 On June 10, Rebecca Company purchased $7,600 of merchandise from Cl
ID: 2376337 • Letter: E
Question
Exercise 5-4 On June 10, Rebecca Company purchased $7,600 of merchandise from Clinton Company, FOB shipping point, terms 2/10, n/30. Rebecca pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Clinton for credit on June 12. The fair value of these goods is $70. On June 19, Rebecca pays Clinton Company in full, less the purchase discount. Both companies use a perpetual inventory system. (a) Prepare separate entries for each transaction on the books of Rebecca Company. (Record journal entries in the order in which they must have occurred. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 10June 11June 12June 19 June 10June 11June 12June 19 June 10June 11June 12June 19 June 10June 11June 12June 19 (b) Prepare separate entries for each transaction for Clinton Company. The merchandise purchased by Rebecca on June 10 had cost Clinton $4,300. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 10 (To record credit sale.) (To record cost of merchandise sold.) June 12 (To record merchandise returned.) (To record cost of merchandise returned.) June 19Explanation / Answer
10June Merchandise Inv Dr 7600
Acct Payable Cr 7600
(FOB Shipping pt indicated that Buyer pays shipping Terms 2/10 N/30)
11June Freight-In Dr 400
Cash Cr 400
(FOB Shippng pt payment)
12June Acct Payable dr 300
Goods Returned (Or Merch Inv) Cr 300
19 June Acct payavble Dr 7300
Purch disc Cr 146
Cash Cr 7154
(7600-300)*2% = 146
(b) Prepare separate entries for each transaction for Clinton Company. The merchandise purchased by Rebecca on June 10 had cost Clinton $4,300.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
June 10 Acct Rax Dr 7600
Sales Rev Cr 7600
COGS Dr 4300
Merch Inv Cr 4300
(To record credit sale.) (To record cost of merchandise sold.)
June 12 (To record merchandise returned.) (To record cost of merchandise returned.)
June 19 Sales Return Dr 300
Acct Raxble Cr 300
Merch Inv Dr 70
COGS Cr 70