Question

Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System

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., $45,950, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $30,560.
2.	Summit Company paid freight of $1,115 for delivery of merchandise sold to Beartooth Co. on August 1.
5.	Summit Company sold merchandise on account to Beartooth Co., $69,380, terms FOB shipping point, n/eom. The cost of the goods sold was $36,190.
9.	Beartooth Co. paid freight of $2,240 on August 5 purchase from Summit Company.
15.	Summit Company sold merchandise on account to Beartooth Co., $54,300, terms FOB shipping point, 1/10, n/30. Summit paid freight of $1,760, which was added to the invoice. The cost of the goods sold was $34,930.
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.

Required:

1. Journalize the August transactions for Beartooth Co. (the buyer).

Date	Account	Debit	Credit
Aug. 1

Date	Account	Debit	Credit
Aug. 5

Date	Account	Debit	Credit
Aug. 9

Date	Account	Debit	Credit
Aug. 15

Date	Account	Debit	Credit
Aug. 16

Date	Account	Debit	Credit
Aug. 25

Date	Account	Debit	Credit
Aug. 31

2. Journalize the August transactions for Summit Company (the seller).

Date	Account	Debit	Credit
Aug. 1

Date	Account	Debit	Credit
Aug. 1

Date	Account	Debit	Credit
Aug. 2

Date	Account	Debit	Credit
Aug. 5

Date	Account	Debit	Credit
Aug. 5

Date	Account	Debit	Credit
Aug. 15

Date	Account	Debit	Credit
Aug. 15

Date	Account	Debit	Credit
Aug. 15

Date	Account	Debit	Credit
Aug. 16

Date	Account	Debit	Credit
Aug. 25

Date	Account	Debit	Credit
Aug. 31

Answer 1

Summit Company - Seller
JOURNAL
Date	ACCOUNT NAME	POST REF.	DEBITS	CREDITS
1-Aug	Accounts payable (beartooth co)		45,950
	sales			45,950
	Cost of goods sold		30,560
	inventory			30,560
2-Aug	Friegth		1,115
	Cash			1,115
	feight paid as its Free on board destination
5-Aug	Accounts payable (beartooth co)		69,380
	sales			69,380
	Cost of goods sold		36,190
	inventory			36,190
15-Aug	Accounts payable (beartooth co)		56,060
	sales			56,060
	Cost of goods sold		36,190
	inventory			36,190
16-Aug	cash		45,031
	discount allowed		919
	Accounts payable (beartooth co)			45,950
25-Aug	cash		55,499
	discount allowed		561
	Accounts payable (beartooth co)			56,060
31-Aug	cash		69,380
	Accounts payable (beartooth co)			69,380

Beartooth co
JOURNAL
Date	ACCOUNT NAME	POST REF.	DEBITS	CREDITS
1-Aug	purchase account		45,950
	Account payable ( summit company)			45,950
5-Aug	purchase account		69,380
	Account payable ( summit company)			69,380
9-Aug	freight		2,240
	cash			2,240
15-Aug	purchase account		56,060
	Account payable ( summit company)			56,060
16-Aug	Account payable ( summit company)		45,950
	discount received			919
	cash			45,031
25-Aug	Account payable ( summit company)		56,060
	discount received			561
	cash			55,499
31-Aug	Account payable ( summit company)		69,380
	cash			69,380