Question

Q3)Prepare journal entries to record the following merchandising transactions of Wave company ,which applies the perpetual inventory system.

July 3:Purchased merchandise from CAP Corp for $15000 under credit terms of 1/10,n/30,FOB destination,invoice dated july 3.

July 4:At CAP’s request,Wave paid $250 cash for freight charges on the july 3 purchase ,reducing the amount owed to CAP .

July 7:Sold merchandise to Morris Co for 10,500 under credit terms of2/10,n/60,FOB destination invoice dated july 7.The mercahndise had cost $7500.

July 10:Purchased merchandise from Murdock Corporation for $14,200 under credit terms of 1/10,n/45,FOB sshipping point,invoice dated July 10 .The invoice showed that at Wave’s request,Murdock paid the $600 shipping charges and added that amount to the bill.

July 11:Paid $300 cash for shipping charges related to the july7 sale to Morris Co.

July 12:Morris returned merchandise from the july 7 sale that had cost Wave $1250 and been sold for $1750.The merchandise was restored to inventory.

July 17:Received balance due from Morris Co for the july 7sale less the return on july 12.

July20:Paid the amount due Murdock Corporation for the july 10 purchase less the price reduction granted.

July 21:Sold merchandise to Ulsh for$9,000 under credit terms of 1/10,n/30,FOB shipping point,invoice dated july 21.The merchandise had cost $6,250.

July 30:Received Ulsh’s cash payment for the amount due from the july 21 sale.

Answer 1