Question

Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop commenced business on September 1, 2019. The firm purchases merchandise on open account. The firm’s purchases, purchase returns and allowances, and cash payments on account during September 2019 follow:

DATE		TRANSACTIONS
2019
Sept.	2	Purchased ski boots for $5,100 plus a freight charge of $160 from Colorado Ski Shop, Invoice 6672, terms n/30.
	3	Purchased skis for $10,700 from Alaska Supply Company, Invoice 5916; terms 1/10, n/30.
	7	Received Credit Memorandum 165 for $850 from Colorado Ski Shop for return of damaged ski boots; the boots were originally purchased September 2 on Invoice 6672.
	11	Purchased ski jackets for $3,500 from Cold Mountain Clothing Company, Invoice 4091, terms n/30.
	12	Issued Check 104 to Alaska Supply Company in payment of Invoice 5916, dated September 3, less the cash discount.
	22	Purchased ski poles for $3,260 plus a freight charge of $195 from Alaska Supply Company, Invoice 5950, terms 3/10, n/30.
	23	Purchased ski pants for $1,750 from Swenson Ski Goods, Invoice 528, terms n/30.
	25	Received Credit Memorandum 245 for $250 from Swenson Ski Goods for return of defective ski pants; the pants were originally purchased September 23 on Invoice 528.
	27	Purchased ski sweaters for $4,100 plus a freight charge of $175 from Colorado Ski Shop, Invoice 6722, terms n/30.
	30	Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated September 2, less the return of September 7.

Required:
Record the transactions in a general journal.

Analyze:
What was the amount of the cash discount on September 12?

Answer 1

Ans:

Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
02-Sep-19	Purchases	5100
	Freight-in	160
	Accounts Payable - Colorado Ski Shop		5260
	(To record purchase wide Invoice No. 6672)
03-Sep-19	Purchases	10700
	Accounts Payable - Alaska Supply Co.		10700
	(To record purchase wide Invoice No. 5916)
07-Sep-19	Accounts Payable - Colorado Ski Shop	850
	Purchase return & Allowances		850
	(To record the credit Note 165 for defective goods returned)
11-Sep-19	Purchases	3500
	Accounts Payable - Cold Mountain Clothing Co.		3500
	(To record purchase wide Invoice No. 4091)
12-Sep-19	Accounts Payable - Alaska Supply Co.	10700
	Cash ($10,700 X 99%)		10593
	Purchases Discount ($10,700 x 1%)		107
	(to record the cash paid)
22-Sep-19	Purchases	3260
	Freight-in	195
	Accounts Payable - Alaska Supply Co.		3455
	(To record purchase wide Invoice No. 5950)
23-Sep-19	Purchases	1750
	Accounts Payable - Swenson Ski Goods		1750
	(To record purchase wide Invoice No. 528)
25-Sep-19	Accounts Payable - Swenson Ski Goods	250
	Purchase return & Allowances		250
	(To record the credit Note 245 for defective goods returned)
27-Sep-19	Purchases	4100
	Freight-in	175
	Accounts Payable - Colorado Ski Shop		4275
	(To record purchase wide Invoice No. 6722)
30-Sep-19	Accounts Payable - Colorado Ski Shop	4410
	Cash		4410
	(To record the cash paid)

Hope this helped ! Let me know in case of any queries.