Question

Prepare journal entries to record the following merchandising transactions of Mitchell's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—Taylor.)

Jul.		1		Purchased merchandise from Taylor Company for $10,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
Jul.		2		Sold merchandise to Lane Co. for $2,900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $1,740.
Jul.		3		Paid $925 cash for freight charges on the purchase of July 1.
Jul.		8		Sold merchandise that had cost $3,400 for $5,700 cash.
Jul.		9		Purchased merchandise from Cabela Co. for $4,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
Jul.		11		Returned $800 of merchandise purchased on July 9 from Cabela Co. and debited its account payable for that amount.
Jul.		12		Received the balance due from Lane Co. for the invoice dated July 2, net of the discount.
Jul.		16		Paid the balance due to Taylor Company within the discount period.
Jul.		19		Sold merchandise that cost $3,600 to Walker Co. for $5,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
Jul.		21		Gave a price reduction (allowance) of $1,000 to Walker Co. for merchandise sold on July 19 and credited Walker’s accounts receivable for that amount.
Jul.		24		Paid Cabela Co. the balance due, net of discount.
Jul.		30		Received the balance due from Walker Co. for the invoice dated July 19, net of discount.
Jul.		31		Sold merchandise that cost $6,600 to Lane Co. for $11,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

prepare the general journal

Answer 1