Prepare the journal entries to record these transactions on the books of Woodwar
ID: 2418005 • Letter: P
Question
Prepare the journal entries to record these transactions on the books of Woodward Co. using a periodic inventory system. (Record journal entries in the order presented in the problem.)
This information relates to Woodward Co. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)1. On April 5, purchased merchandise from Cozart Company for $28,400, terms 2/10, n/30. 2. On April 6, paid freight costs of $2,100 on merchandise purchased from Cozart Company. 3. On April 7, purchased equipment on account for $39,840. 4. On April 8, returned some of the April 5 merchandise to Cozart Company, which cost $5,000. 5. On April 15, paid the amount due to Cozart Company in full.
Explanation / Answer
1.On April 5, purchased merchandise from Cozart Company for $28,400, terms 2/10, n/30.
Dr Purchases $28,400
Cr Accounts payable $28,400
2. On April 6, paid freight costs of $2,100 on merchandise purchased from Cozart Company.
Dr Inward freight/Transportation-in $2100
Cr Cash $2100
3. On April 7, purchased equipment on account for $39,840.
Dr Equipment $39840
Cr AP $39840
4.On April 8, returned some of the April 5 merchandise to Cozart Company, which cost $5,000
Dr Purchase returns and allowances $5000
Cr AP $5000
5. On April 15, paid the amount due to Cozart Company in full.
Dr AP $23,400 ($28,400 - $5,000)
Cr Cash 22932
Cr Purchase discount $468($23,400 x 2%)