Prepare journal entries for May, 2011 to record the following transactions for A
ID: 2380361 • Letter: P
Question
Prepare journal entries for May, 2011 to record the following transactions for Alfa Co.. Assume a perpetual inventory system.Enter the transaction letter as the description. Also, the dates must be entered in the format dd/mmm (ie. 15/Jan).
a.May 3: Alfa Co. purchased merchandise from Runners for $4,500 under credit terms of 2/10, n/30, FOB destination.
b.May 3: Alfa Co. paid $100 for supplies purchased today.
c.May 22: After negotiations with Runners concerning problems with the merchandise purchased on May 3, received a credit memorandum granting a price reduction of $2,200.
d.May 23: Alfa Co. purchased merchandise on credit from Resource Product Co., terms 2/15, n/30, $5,300, FOB destination.
e.May 25: After negotiations with Resource Product Co. concerning problems with the merchandise purchased on May 23, received a credit memorandum granting a price reduction of $2,600.
f.May 30: Paid Runners the balance due.
g.May 31: Paid the amount due to Resource Product Co. for the May 23 purchase.
Please use the '+' and '-' buttons to change the number of accounts (if necessary) for each journal entry
Explanation / Answer
3/May Merchandise A/C Dr 4500 Acct Payable Cr 4500 (Purchased Merchandise from Runners for $4500 on account.) 3/May Acct Payable Dr 100 Cash Cr 100 (Paid $100 to Runners ) 22/May Acct Payable Dr 2200 Note Rxable A/C Cr 2200 (Purchase from Runners reduced by 2200 through a Credit Memorandum) 23/May Merchandise A/C Dr 5300 Acct Payable Cr 5300 (To record merchandise from Resource prod for 5300) 25/May Acct Payable Dr 2600 Note Rxable A/C Cr 2600 (Purchase from Resource prod reduced by 2600 through a Credit Memorandum) 30/May Acct Payable Dr 2200 Cash Cr 2200 (Paid Runners 4500-100-2200 = 2200) 31 May Acct Payable Dr 2646 Cash Cr 2646 (Paid Runners 5300-2600 = 2700*0.98 =2646 aftertaking 2% discount)