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In: Accounting

Initial balances: Capital Stock $ 41,000, Advance sale $ 3,000, Cash $ 55,000, Accounts receivable $...

Initial balances: Capital Stock $ 41,000, Advance sale $ 3,000, Cash $ 55,000, Accounts receivable $ 15,000, Inventory $ 41,000, Notes receivable (2 years) $ 2,300, accumulated profits $ 69,300

Register the following transactions of a company in T accounts

a. Purchase inventory for $ 10,000 from x company on credit.
b. The company pays $ 40 freight on the purchase.
c Sells $ 57,000 of inventory on credit to Adam.
d. Adam returns the inventory for $ 5,200.
e. Adam receives a defective inventory and the company gives him a rebate of $ 8,000
F. The company returns the defective inventory for $ 800 to x company.
g. The company pays to x company the balance due at a discount of 1%.
h. Adam pays his balance and the company gives him a 2% discount on the balance owed.
i. The market value of the inventory is $ 27,000.

Solutions

Expert Solution

Answer :- line wise images

all t - accounts A to H answers are covered but mixed because all entries are matching to each other.

i answer is that market value of inventory is not included because of not needed.

working note :-

a. inventory = 10000-800=9200+92 = 9292

because of purchase return of 800 and discount of 92 ( A.F, and G part)

b. sell inventory to adam = 57000-5200= 51800-1036= 50764

because of sales return of 5200 and discount of 1036. (C,D, and H part)

ekkarill92 answered 2 years ago
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