Question

Gunnison Creamery produces a variety of specialty ice creams and buys ingredients from many suppliers. Each supplier seems to have unique policies about discounts and freight terms. Gunnison Creamery records all purchases "gross" and uses a periodic inventory system. Gunnison recently hired a new bookkeeper and needs your help to develop a template of sample journal entries for different scenarios. For purposes of preparing the template, assume that the purchase is $1,000 and freight is $100.

Scenario	Cash Discount	Freight Terms	Discount Condition
1	2/10, n/30	F.O.B. Shipping point/freight prepaid	taken
2	2/10, n/30	F.O.B. Shipping point/freight prepaid	missed
3	2/10, n/30	F.O.B. Destination/freight prepaid	taken
4	2/10, n/30	F.O.B. Destination/freight prepaid	missed
5	2/10, n/30	F.O.B. Shipping point/freight collect	taken
6	2/10, n/30	F.O.B. Shipping point/freight collect	missed
The first scenario is done as an example on the preprinted worksheet. For the remaining scenarios, use the following accounts to record the transactions. After downloading the file below, you are to record your entries on the Worksheet tab and then upload your completed file in Blackboard.
Cash
Purchases
Accounts Payable
Purchase Discounts
Freight-in

Answer 1

	Date	Accounts Titles & Explanation	Debit	Credit
1		Purchase	$1,000
		Freight-in	$100
		Accounts Payable		$1,100
		Accounts Payable	$1,100
		Purchase discount		$20
		Cash		$1,080
2		Purchase	$1,000
		Freight-in	$100
		Accounts Payable		$1,100
		Accounts Payable	$1,100
		Cash		$1,100
3		Purchase	$1,000
		Accounts Payable		$1,000
		Accounts Payable	$1,000
		Purchase discount		$20
		Cash		$980
4		Purchase	$1,000
		Accounts Payable		$1,000
		Accounts Payable	$1,000
		Cash		$1,000
5		Purchase	$1,000
		Accounts Payable		$1,000
		Freight-in	$100
		Cash		$100
		Accounts Payable	$1,000
		Purchase discount		$20
		Cash		$980
6		Purchase	$1,000
		Accounts Payable		$1,000
		Freight-in	$100
		Cash		$100
		Accounts Payable	$1,000
		Cash		$1,000