Question

Purchase-Related Transactions Using Perpetual Inventory System

The following selected transactions were completed by Niles Co. during March of the current year:

Mar. 1.	Purchased merchandise from Haas Co., $18,400, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $150 was added to the invoice.
5.	Purchased merchandise from Whitman Co., $15,400, terms FOB destination, n/30.
10.	Paid Haas Co. for invoice of March 1.
13.	Purchased merchandise from Jost Co., $7,600, terms FOB destination, 1/10, n/30.
14.	Issued debit memo to Jost Co. for $1,400 of merchandise returned from purchase on March 13.
18.	Purchased merchandise from Fairhurst Company, $11,300, terms FOB shipping point, n/eom.
18.	Paid freight of $250 on March 18 purchase from Fairhurst Company.
19.	Purchased merchandise from Bickle Co., $10,550, terms FOB destination, 2/10, n/30.
23.	Paid Jost Co. for invoice of March 13, less debit memo of March 14.
29.	Paid Bickle Co. for invoice of March 19.
31.	Paid Fairhurst Company for invoice of March 18.
31.	Paid Whitman Co. for invoice of March 5.

Required:

Journalize the entries to record the transactions of Britt Co. for March.

Mar. 1
Mar. 5
Mar. 10
Mar. 13
Mar. 14
Mar. 18-purchase
Mar. 18-freight
Mar. 19
Mar. 23
Mar. 29
Mar. 31-Fairhurst
Mar. 31-Whitman

Answer 1

Solution:

Journal entry:

Date	Account title and explanation	Debit	Credit
mar 1	Merchandise inventory [$18,400-($18,400*2%)+$150]	$18,182
	Accounts payable		$18,182
	(To record merchandise inventory purchased on account)
Mar 5	Merchandise inventory	$15,400
	accounts payable Whitman co		$15,400
	(To record merchandise inventory purchased on account)
Mar 10	Accounts payable Haas co	$18,182
	Cash		$18,182
	(To record cash payment)
Mar 13	Merchandise inventory [$7,600 -(7,600*1%)]	$7,524
	Accounts payable Jost co		$7,524
	(To record merchandise inventory purcchased on account)
Mar 14	Accounts payable Jost co [$1,400-($1,400*1%)]	$1,386
	Merchandise inventory		$1,386
	(To record returned from purchase)
Mar 18	Merchandise inventory	$11,300
	Accounts payable Fairhurts co		$11,300
	(to record merchandise inventory purchased on account)
Mar 18	Merchandise inventory	$250
	Cash		$250
	(To record freight paid)
Mar 19	Merchandise inventory [10,550-($10,550*2%)]	$10,339
	Accounts payable Bickle co		$10,339
	(To record merchandise inventory purchased on account)
Mar 23	Accounts payable Jost co ($7,524-$1,389)	$6,138
	cash		$6,138
	(To record cash payment)
Mar 29	Accounts payable bricle co	$10,339
	cash		$10,339
	(To record cash payment)
Mar 31	Accounts payable fairhurst co	$11,300
	cash		$11,300
	(To record cash payment)
Mar 31	Accounts payable Whitman co	$15,400
	cash		$15,400
	(To record cash payment)

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