The following selected transactions were completed during August between Summit
ID: 2519405 • Letter: T
Question
The following selected transactions were completed during August between Summit Company and Beartooth Co.:
Aug. 1 Summit Company sold merchandise on account to Beartooth Co., $52,150, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $25,940. 2 Summit Company paid freight of $1,235 for delivery of merchandise sold to Beartooth Co. on August 1. 5 Summit Company sold merchandise on account to Beartooth Co., $60,090, terms FOB shipping point, n/eom. The cost of the goods sold was $36,900. 9 Beartooth Co. paid freight of $2,140 on August 5 purchase from Summit Company. 15 Summit Company sold merchandise on account to Beartooth Co., $62,600, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of $1,515, which was added to the invoice. The cost of the goods sold was $32,600. 16 Beartooth Co. paid Summit Company for purchase of August 1. 25 Beartooth Co. paid Summit Company on account for purchase of August 15. 31 Beartooth Co. paid Summit Company on account for purchase of August 5.Explanation / Answer
SOLUTION:
1) Summit Company
Aug.
1
Accounts Receivable—Beartooth Co.
52,150
Sales
52,150
1
Cost of Merchandise Sold
25,940
Merchandise Inventory
25,940
2
Delivery Expense
1,235
Cash
1,235
5
Accounts Receivable—Beartooth Co.
60,090
Sales
60,090
5
Cost of Merchandise Sold
36,900
Merchandise Inventory
36,900
15
Accounts Receivable—Beartooth Co.
62,600
Sales
62,600
15
Accounts Receivable—Beartooth Co.
1515
Cash
1515
15
Cost of Merchandise Sold
32,600
Merchandise Inventory
32,600
16
Cash
51107
Sales Discounts
1043
Accounts Receivable—Beartooth Co.
52150
25
Cash
63489
Sales Discounts
626
Accounts Receivable—Beartooth Co.
64115
31
Cash
60,090
Accounts Receivable—Beartooth Co.
60,090
2) Beartooth Co.
Aug.
1
Merchandise Inventory
52,150
Accounts Payable—Summit Company
52,150
5
Merchandise Inventory
60,090
Accounts Payable—Summit Company
60,090
9
Merchandise Inventory
2,140
Cash
2,140
15
Merchandise Inventory
64115
Accounts Payable—Summit Company
64115
16
Accounts Payable—Summit Company
52150
Cash
51107
Merchandise Inventory
1043
25
Accounts Payable—Summit Company
64,115
Cash
63489
Merchandise Inventory
626
31
Accounts Payable—Summit Company
60,090
Cash
60,090
Aug.
1
Accounts Receivable—Beartooth Co.
52,150
Sales
52,150
1
Cost of Merchandise Sold
25,940
Merchandise Inventory
25,940
2
Delivery Expense
1,235
Cash
1,235
5
Accounts Receivable—Beartooth Co.
60,090
Sales
60,090
5
Cost of Merchandise Sold
36,900
Merchandise Inventory
36,900
15
Accounts Receivable—Beartooth Co.
62,600
Sales
62,600
15
Accounts Receivable—Beartooth Co.
1515
Cash
1515
15
Cost of Merchandise Sold
32,600
Merchandise Inventory
32,600
16
Cash
51107
Sales Discounts
1043
Accounts Receivable—Beartooth Co.
52150
25
Cash
63489
Sales Discounts
626
Accounts Receivable—Beartooth Co.
64115
31
Cash
60,090
Accounts Receivable—Beartooth Co.
60,090