Question

Sampson Co. sold merchandise to Batson Co. on account, $26,800, terms 2/15, net 45. The cost of the goods sold is $20,100. The Batson Co. paid the invoice within the discount period. Assume both Sampson and Batson use a perpetual inventory system.

Prepare the entries that Sampson Company would record for the information above.

a. Accounts Receivable-Batson Co.:

Sales:

b. Cost of Goods Sold: 20,100

Inventory: 20,100

c. Cash:

Accounts Receivable-Batson Co.:

Prepare the entries that Batson Company would record for the information above.

a. Inventory:

Accounts Payable-Sampson Co.:

b. No entry required No entry required

c. Accounts Payable-Sampson Co.:

Cash:

Answer 1

Sampson Comapnay :
Transaction	General Journal	Debit	Credit
a)	Accounts receivable - Batson Co.	$ 26,800
	Sales		$ 26,800
	( To recod Merchandise sold to Batson Co. )
b)	Cost of goods sold	$ 20,100
	Inventory		$ 20,100
	( To record Cost of goods sold )
c)	Cash ($ 26,800 - $536)	$ 26,234
	Sales Discount (26,800*2%)	$ 536
	Accounts receivable - Batson Co.		$ 26,800
	( To record Cash received on sales of Merchandise )
Batson Company :
Transaction	General Journal	Debit	Credit
a)	Inventory	$ 26,800
	Accounts Payable -Sampson Co.		$ 26,800
	( To record Purchase of Merchandise from sampson Co. )
b)	No Journal Entry is required
c)	Accounts Payable -Sampson Co.	$ 26,800
	Cash ($ 26,800 - $536)		$ 26,234
	Inventory (26,800*2%)		$ 536
	(To record cash paid on Purchase of Merchandise )