Question

In: Accounting

Prepare general journal entries to record the following perpetual system merchandising transactions of Acme Company. May    ...

Prepare general journal entries to record the following perpetual system merchandising transactions of Acme Company.

May     2   Purchased merchandise from Yeti Co. for $9,000 under credit terms of 1/15, n/30, FOB factory.

4   Sold merchandise to Flinstone Co. for $1,200 under credit terms of 2/10, n/60, FOB shipping point. The merchandise had cost $750.

4 Paid $150 for freight charges on the purchase of May 2.

             9 Sold merchandise that cost $1,800 for $2,400 cash.

10   Purchased merchandise from Richter Co. for $3,450 under credit terms of 2/15, n/60, FOB destination.

12   Received a $300 credit memorandum acknowledging the return of merchandise purchased on May 10.

14 Received the balance due from Flinstone Co. for the credit sale

    dated May 4.

15 Sold for cash a piece of office equipment at its original cost, $500.

17 Paid the balance due to Yeti Co.

18 Purchased $820 of cleaning supplies from A & Z Suppliers;

      terms n/1 5.

20   Sold merchandise that cost $1,350 to Caresalot Co. for $1,875 under credit terms of 2/15, n/60, FOB shipping point.

22   Issued a $300 credit memorandum to Caresalot Co. for an allowance on goods sold on May 20.

23   Received a debit memorandum from Caresalot Co. for an error that overstated the total invoice by $75.

25 Paid Richter Co. the balance due.

31 Received the balance due from Caresalot Co. for the credit sale dated

      May 20.

31   Sold merchandise that cost $4,800 to Flinstone Co. for $7,500 under credit terms of 2/10, n/60, FOB shipping point.

Solutions

Expert Solution

Acme Company
General Journal
Date Account Debit Credit
2-May Inventory $        8,910
         Yeti Co. $        8,910
(Purchased Merchandise from Yeti & Co.)
Net of Discount=($9000 - 1% of $9000)=$8910
4-May Flinstone Co. $        1,176
                 Sales $        1,176
(Sold merchandise to Flinstone Co.)
Net of Discount=(1200 - 2% of 1200)=1176
Cost of Goods Sold $           750
                      Inventory $           750
(Cost of Merchandise sold to Flinstone Co.)
4-May Inventory $           150
             Cash $           150
(Freight charges for a purchase on May 2)
9-May Cash $        2,400
       Sales $        2,400
(Merchandise sold for cash)
Cost of Goods Sold $        1,800
                      Inventory $        1,800
(Cost of Merchandise sold for cash)
10-May Inventory $        3,381
         Richter Co. $        3,381
(Purchased Merchandise from Richter Co.)
Net of Discount=($3450 - 2% of $3450)=$3381
12-May    Richter Co. $           300
               Inventory $           300
(Credit memorandum received for the return of merchandise)
14-May Cash $        1,176
Flinstone Co. $        1,176
(Received balance from Flinstone Co.)
15-May Cash $           500
            Office Equipment $           500
(Office Equipment Sold)
17-May Yeti Co. $        8,910
            Cash $        8,910
(Paid to Yeti & Co.)
18-May Cleaning Supplies $           820
               A&Z Suppliers $           820
(Purchased cleaning supplies on the credit of 15 days)
20-May Caresalot Co. $ 1,837.50
                   Sales $ 1,837.50
(Sold merchandise to Caresalot Co.)
Net of Discount=(1875 - 2% of 1875)=1837.50
Cost of Goods Sold $        1,350
               Inventory $        1,350
(Cost of Merchandise sold to Caresalot Co.)
22-May Sales $           300
            Caresalot Co $           300
(Credit memorandum issued for allowance on goods sold to Caresalot Co.)
23-May Sales $              75
            Caresalot Co $              75
(Debit memorandum issued by Caresalot Co. for amount overstated in the invoice.)
25-May Richter Co. $        3,081
               Cash $        3,081
(Paid balance to Richter Co.)
31-May Cash $ 1,462.50
           Caresalot Co. $ 1,462.50
Received balance from Caresalot Co. for balance ($1837.50-300-75)
31-May Flinstone Co.
                 Sales $        7,350
(Sold merchandise to Flinstone Co.) $        7,350
Net of Discount=(7500 - 2% of 7500)=7350
Cost of Goods Sold $        4,800
                      Inventory $        4,800
(Cost of Merchandise sold to Flinstone Co.)

Perpetual Inventory system provides a balance of the cost of goods available for sales and cost of goods sold.

Under this system purchase account is not maintained instead Inventory is debited for purchase of merchandise

and related expenses incurred in relation to purchases.


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