Periodic Inventory System the following selected transactions were completed by
ID: 2465820 • Letter: P
Question
Periodic Inventory System
the following selected transactions were completed by Air System Company during January of the current year. Air System Company uses the periodic inventory system.
Jan.2. Purchased $18200 of merchandise on account, FOB shipping point, terms 2/15,n/30.
5. Paid freight of $190 on the January 2 purchase.
6. Returned $2,750 of the merchandise purchased on January 2.
13. Sold merchandise on account, $ 37,300, FOB destination 1/10, n/30. The cost of merchandise sold was $22,400.
15. Paid freight of $ 215. for the merchandise sold on January 13.
17. Paid for the purchase of January 2 less the return and discount.
23. Received patment on account for the sale of January 13 less the discount
2. Journalize the entries to record the transactions of Air Systems Company.
Explanation / Answer
Journal entry :
date accounts & explanation debit credit Jan 2 Purchase 18200 Account payable 18200 (To record purchase) Jan 5 Freight in 190 Cash 190 (To record freight paid) jan 6 Account payable 2750 Purchase return and allowance 2750 (To record purchase return) Jan 13 Account receivable 37300 Sales revenue 37300 (To record sales) Jan 15 Freight out 215 Cash 215 (To record freight paid) Jan 17 Account payable (18200-2750) 15450 Cash (15450*98%) 15141 Purchase discount 309 (To record amount paid) Jan 23 Cash (37300*99%) 36927 Sales discount 373 Account receivable 37300 (To record amount received)