Prepare journal entries to record each of the following transactions of a mercha

Question

Prepare journal entries to record each of the following transactions of a merchandising company The company uses a perpetual inventory system and the gross method. 1,ese units of product at a cost of $16 per unit. Terns of the sale are 4/10, n/58; the invoice is dated Novenber Nov. 7 Returned 5e defective units from the Novenber 5 purchase and received full credit. Nov. 15 Paid the amount due from the November 5 purchase, less the return on November 7 View transaction list View journal entry worksheet No Date /1 Nov 05 Administrative expenses 44,400 44,400 Accumulated depreciation 1.000 1,000 Accounts payable 170 21 170 --2-t Nov 07-/Accounts payable 1.000 2.170 3Nov 15 Accounts payable 2,170

Explanation / Answer

Solution:

Journal Entries Date Particulars Debit Credit 5-Nov Inventory A/c Dr (1050*$16) $16,800.00       To Accounts Payable $16,800.00 (Being goods purchased on credit) 7-Nov Accounts Payable Dr (50*$16) $800.00       To Inventory $800.00 (Being 50 defective units of goods returned) 15-Nov Accounts Payable Dr $16,000.00       To Cash ($16,000*96%) $15,360.00       To Purchase discount ($16000*4%) $640.00 (Being payment made with in discount period)

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