March 3. Purchased merchandize on account from Hasbro co. List price $16,000, tr
ID: 2380384 • Letter: M
Question
March 3. Purchased merchandize on account from Hasbro co. List price $16,000, trade discount 30%, terms FOB shipping point, 2/10, n/30 with prepaid transportation costs of $800 added to the invoice.
Purchased merchandise on account from anne co. $7000, terms FOB destination 1/10,n/30
Sold merchandise on account to Howl Co, list price $5000, trade discount 20% terms 2/10,n/30. The cost of merchandise sold was $1500
Received cash on account from sales of Mar 5 to Howl co. less discount
Sold merchandise on nonbank credit cards and reported account to the car company $3500. The cost of merchandise sold was $2000
Received cash from card company credit card sales of mar 20, less $400 service fee
Explanation / Answer
1. DR Inventory $16,000
DR Transportation Expense $800
CR Trade discount $4800
CR Accounts Payable $12,000
2. DR Inventory $7000
CR Accounts Payable $7000
3. DR Accounts Receivable $4000
DR Trade Discount $1000
DR COGS $1500
CR Inventory $1500
CR Sales Revenue $5000
4. DR Cash $3200
DR Sales Discount $800
CR Accounts Receivable $4000
5. DR Credit Card Sales Receivable $3500
DR COGS $2000
CR Inventory $2000
CR Sales Revenue $3500
6. Cash $3100
Service Fee Expense $400
Credit Card Sales Receivable $3500