In: Accounting
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.
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. |