Prepare an Excel spreadsheet of the journal entries for the first part of August
ID: 2478758 • Letter: P
Question
Prepare an Excel spreadsheet of the journal entries for the first part of August 2014 for the Pit Bull Sings T-shirt Distributors, based on the following information: Assignment Template attached below AUG 1 – Purchased merchandise from Aerotek Company for $7,500 under credit terms of 1/10, n/30, FOB destination; invoice dated August 1. AUG 4 – At Aerotek’s request, Pit Bull Sings paid $200 cash for freight charges on the August 1 purchase, reducing the amount owed to Aerotek. AUG 5 – Sold merchandise to Laird Corp. for $5,200 under credit terms of 2/10, n/60; invoice dated August 5. The merchandise had a cost of $4,000. AUG 8 – Paid Aerotek for purchase on August 1 within the discount period. AUG 9 – Received payment from Laird for sale on August 4 within the discount period. Instructions: Complete this assignment using an Excel spreadsheet, and date and explain each entry on your deliverable.
Explanation / Answer
1-Aug Inventory Dr 7500 Accounts payable Cr 7500 ( To record purchase of inventory on FOB destination) 4-Aug Accounts payable Dr 200 Cash Cr 200 ( To record payment of freight on behalf of the seller) 5-Aug Accounts receivable Dr 5200 Sales Cr 5200 ( To record sales of inventory) 5-Aug Cost of goods sold Dr 4000 Inventory Cr 4000 ( To record COGS for sale) 8-Aug Accounts payable Dr 7300 (7500-200) Cash Cr 7225 Discount earned Cr 75 ( 7500*1%) ( To record payment of accounts payable) 9-Aug Cash Dr 5096 Discount Dr 104 Accounts receivable Cr 5200 ( To record payment received )