NewTech Medical Devices is a medical devices wholesaler that commenced business

Question

NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:

Purchased merchandise for $1,350 from BioCenter Inc., Invoice 606; terms 2/10, n/30.

Purchased merchandise for $5,150, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30.

Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102.

Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $350 that was returned; the goods were purchased on Invoice 1011, dated June 5.

Purchased merchandise for $1,610 from BioCenter Inc., Invoice 612; terms 2/10, n/30.

Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103.

Purchased merchandise with a list price of $8,500 and trade discounts of 20 percent and 15 percent from Park Research, Invoice 1029, terms n/30.

Returned merchandise purchased on June 20 as defective, receiving a cash refund of $210.

Purchased merchandise for $2,500, plus a freight charge of $78, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30.

Required:
Journalize the transactions in a general journal.


Analyze:
What was the amount of trade discounts received on the June 15 purchase from Park Research?

Issued Check 101 to purchase merchandise, $3,800.

Note: Enter debits before credits.

Purchased merchandise for $1,350 from BioCenter Inc., Invoice 606; terms 2/10, n/30.

Note: Enter debits before credits.

Purchased merchandise for $5,150, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30.

Note: Enter debits before credits.

Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102.

Note: Enter debits before credits.

Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $350 that was returned; the goods were purchased on Invoice 1011, dated June 5.

Note: Enter debits before credits.

Purchased merchandise for $1,610 from BioCenter Inc., Invoice 612; terms 2/10, n/30.

Note: Enter debits before credits.

Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103.

Note: Enter debits before credits.

Purchased merchandise with a list price of $8,500 and trade discounts of 20 percent and 15 percent from Park Research, Invoice 1029, terms n/30.

Note: Enter debits before credits.

Issued Check 104 to purchase merchandise, $2,300.

Note: Enter debits before credits.

Returned merchandise purchased on June 20 as defective, receiving a cash refund of $210.

Note: Enter debits before credits.

Purchased merchandise for $2,500, plus a freight charge of $78, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30.

Note: Enter debits before credits.

Analyze

What was the amount of trade discounts received on the June 15 purchase from Park Research?

DATE TRANSACTIONS 2019 June 1 Issued Check 101 to purchase merchandise, $3,800. 3

Purchased merchandise for $1,350 from BioCenter Inc., Invoice 606; terms 2/10, n/30.

5

Purchased merchandise for $5,150, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30.

9

Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102.

10

Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $350 that was returned; the goods were purchased on Invoice 1011, dated June 5.

11

Purchased merchandise for $1,610 from BioCenter Inc., Invoice 612; terms 2/10, n/30.

14

Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103.

15

Purchased merchandise with a list price of $8,500 and trade discounts of 20 percent and 15 percent from Park Research, Invoice 1029, terms n/30.

20 Issued Check 104 to purchase merchandise, $2,300. 25

Returned merchandise purchased on June 20 as defective, receiving a cash refund of $210.

30

Purchased merchandise for $2,500, plus a freight charge of $78, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30.

Explanation / Answer

Part 1 journal entries

Part 2 Analyze

The amount of trade discounts received on the June 15 purchase from Park Research was $2,720 (List price, $8,500, less purchase price, $5,789).

Date general journal debit credit June 1, 2019 Purchases 3800 Cash 3800 June 3, 2019 Purchases 1350 Accounts Payable/BioCenter Inc. 1350 June 5, 2019 Purchases 5150 Freight in 100 Accounts Payable/New Concepts Corporation 5250 June 9, 2019 Accounts Payable/BioCenter Inc. 1350 Purchases Discounts (1350*2%) 27 Cash (1350-27) 1323 June 10, 2019 Accounts Payable/New Concepts Corporation 350 Purchases Returns and Allowances 350 June 11, 2019 Purchases 1610 Accounts Payable/BioCenter Inc. 1610 June 14, 2019 Accounts Payable/New Concepts Corporation (5250 - 350) 4900 Purchases Discounts (4800*2%) 96 Cash (4900-96) 4804 June 15, 2019 Purchases ($8,500 - $1,700 = $6,800; $6,800-1020 = $5780) 5780 Accounts Payable/Park Research 5780 June 20, 2019 Purchases 2300 Cash 2300 June 25, 2019 cash 210 Purchases Returns and Allowances 210 June 30, 2019 Purchases 2500 Freight in 78 Accounts Payable/New Concepts Corporation 2578

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