Question

In: Accounting

A. On June 10, Crane Company purchased $9,000 of merchandise on account from Pronghorn Company, FOB shipping point, term...

A. On June 10, Crane Company purchased $9,000 of merchandise on account from Pronghorn Company, FOB shipping point, terms 2/10, n/30. Crane pays the freight costs of $550 on June 11. Damaged goods totaling $350 are returned to Pronghorn for credit on June 12. The fair value of these goods is $80. On June 19, Crane pays Pronghorn Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Prepare separate entries for each transaction on the books of Crane Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

B.

Presented below are transactions related to Wildhorse Company. Prepare the journal entries to record these transactions on the books of Wildhorse Company using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
1. On December 3, Wildhorse Company sold $593,600 of merchandise on account to Novak Co., terms 4/10, n/30, FOB destination. Wildhorse paid $430 for freight charges. The cost of the merchandise sold was $383,200.
2. On December 8, Novak Co. was granted an allowance of $29,300 for merchandise purchased on December 3.
3. On December 13, Wildhorse Company received the balance due from Novak Co.

Solutions

Expert Solution

Answer to Question A.

Date Account Title and Explanation Debit Credit
Jun10 Inventory 9,000
Accounts Payable 9,000
(Purchase of Merchandise on account)
Jun 11 Inventory 550
Cash 550
(Freight cost paid)
Jun 12 Accounts Payable 350
Inventory 350
(Damaged goods returned)
Jun 19 Accounts Payable ($9,000 - $350) 8,650
Cash [($9,000 - $350) * 98%] 8,477
Inventory [($9,000 - $350) * 2%] 173

Related Solutions

Exercise 5-4 On June 10, Tuzun Company purchased $6,650 of merchandise from Epps Company, FOB shipping...
Exercise 5-4 On June 10, Tuzun Company purchased $6,650 of merchandise from Epps Company, FOB shipping point, terms 2/10, n/30. Tuzun pays the freight costs of $580 on June 11. Damaged goods totaling $350 are returned to Epps for credit on June 12. The fair value of these goods is $80. On June 19, Tuzun pays Epps Company in full, less the purchase discount. Both companies use a perpetual inventory system. Prepare separate entries for each transaction on the books...
On June 10, Carla Vista Company purchased $8,000 of merchandise on account from Flint Company, FOB...
On June 10, Carla Vista Company purchased $8,000 of merchandise on account from Flint Company, FOB shipping point, terms 1/10, n/30. Carla Vista pays the freight costs of $550 on June 11. Damaged goods totaling $400 are returned to Flint for credit on June 12. The fair value of these goods is $70. On June 19, Carla Vista pays Flint Company in full, less the purchase discount. Both companies use a perpetual inventory system.Prepare separate entries for each transaction for...
5- On June 10, Tala Company purchased on account $50,000 of merchandise from Tigare Company, FOB...
5- On June 10, Tala Company purchased on account $50,000 of merchandise from Tigare Company, FOB destination, terms 2/10, n/30. Tala pays cash the freight costs of $600 on June 11. Damaged goods totaling $700 are returned to Tigare for credit on June 12. On June 19, Tala pays Tigare in full less the purchase discount. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Tala Company.
1a) Rodriguez Company purchased merchandise from Emmett Company with freight terms of FOB shipping point. The...
1a) Rodriguez Company purchased merchandise from Emmett Company with freight terms of FOB shipping point. The freight costs will be paid by the a. shipping company. b.   buyer (Rodriguez Company) c. seller (Emmett Company) d.   buyer and the seller. b) Gee Company purchased merchandise inventory with an invoice price of $7,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Gee Company pays within the discount period? a. $6,300 b. $6,440 c. $6,860 d....
Stu Company sold Behn Company merchandise on account FOB shipping point, 3/10, net 30, for $8592....
Stu Company sold Behn Company merchandise on account FOB shipping point, 3/10, net 30, for $8592. Stu prepaid the $287 shipping charge. Payment will be made within the discount period. What is the journal entry necessary for Stu Company to record this sale? (select all lines of the entry) Select one or more: credit Sales 8592 credit Sales 8334 credit Accounts Receivable 8879 debit Freight 287 debit Cash 287 debit Accounts Receivable 8879 debit Sales 8334 debit Sales 8592 debit...
Apr. 2. Swan Company sold merchandise on account to Bird Company, $13,600, terms FOB shipping point,...
Apr. 2. Swan Company sold merchandise on account to Bird Company, $13,600, terms FOB shipping point, 1/10, n/30. Swan Company paid freight of $480, which was added to the invoice. The cost of the merchandise sold was $8,600. 8. Swan Company sold merchandise on account to Bird Company, $27,000, terms FOB destination, 2/15, n/30. The cost of the merchandise sold was $16,200. 8. Swan Company paid freight of $650 for delivery of merchandise sold to Bird Company on April 8....
Jun 4 Willem Corporation purchased $4,000 worth of merchandise, terms 3/10, n/30, FOB shipping point, from...
Jun 4 Willem Corporation purchased $4,000 worth of merchandise, terms 3/10, n/30, FOB shipping point, from Cate Corporation. The cost of the merchandise to Cate was $2,600. 6 The appropriate party paid shipping costs of $150. 10 Willem returned $700 worth of goods to Cate for full credit. The goods had a cost of $450 to Cate and were placed back into inventory. 12 Willem paid Cate the outstanding balance. Required Prepare the journal entries to record these transactions in...
Martin Co. sold merchandise to Fess Company on December 31, FOB shipping point. If the merchandise...
Martin Co. sold merchandise to Fess Company on December 31, FOB shipping point. If the merchandise is in transit on December 31, the end of the fiscal year, which company would report it in its financial statements? Explain. How is the method of determining the cost of the inventory and the method of valuing it disclosed in the financial statements? What uses can be made of the estimate of the cost of inventory determined by the gross profit method?
Sales-Related Transactions Merchandise is sold on account to a customer for $8,000, terms FOB shipping point,...
Sales-Related Transactions Merchandise is sold on account to a customer for $8,000, terms FOB shipping point, 1/10, n/30. The seller paid the freight of $300. a. Determine the amount of the sale. $? b. Determine the increase to Accounts Receivable. $? (the answer of this problem is not 8,300 or 7,700) c. Determine the amount of the discount for early payment. $? d. Determine the amount due within the discount period. $? (the answer of this problem is not 8,300...
On June 10, Sheridan Company purchased $6,600 of merchandise from Crane Company, terms 4/10, n/30
On June 10, Sheridan Company purchased $6,600 of merchandise from Crane Company, terms 4/10, n/30. Sheridan Company pays the freight costs of $350 on June 11. Goods totaling $300 are returned to Crane Company for credit on June 12. On June 19, Sheridan Company pays Crane Company in full, less the purchase discount. Both companies use a perpetual inventory system. Prepare separate entries for each transaction on the books of Sheridan Company. (If no entry is required, select "No Entry" for...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT