Question

On June 10, Cullumber Company purchased $6,200 of merchandise from Oriole Company, terms 4/10, n/30. Cullumber Company pays the freight costs of $400 on June 11. Goods totaling $300 are returned to Oriole Company for credit on June 12. On June 19, Cullumber Company pays Oriole Company in full, less the purchase discount. Both companies use a perpetual inventory system.On June 10, Cullumber Company purchased $6,200 of merchandise from Oriole Company, terms 4/10, n/30. Cullumber Company pays the freight costs of $400 on June 11. Goods totaling $300 are returned to Oriole Company for credit on June 12. On June 19, Cullumber Company pays Oriole Company in full, less the purchase discount. Both companies use a perpetual inventory system.

A.) Prepare separate entries for each transaction on the books of Cullumber Company.

B.) Prepare separate entries for each transaction for Oriole Company. The merchandise purchased by Cullumber Company on June 10 cost Oriole Company $2,290, and the goods returned cost Oriole Company $230.

Answer 1

a) Journal entry : Cullumber company

Date	account and explanation	debit	credit
June 10	Merchandise inventory	6200
	Account payable		6200
	(To record purchase)
June 11	Merchandise inventory	400
	Cash		400
	(To record freight paid)
June 12	Account payable	300
	Merchandise inventory		300
	(To record gods returned)
June 19	Account payable (6200-300)	5900
	Cash (5900*96%)		5664
	Merchandise inventory		236
	(To record amount paid)

Journal entries : Oriole Company

Date	account and explanation	debit	credit
June 10	Account receivable	6200
	Sales revenue		6200
	(To record sales)
	Cost of goods sold	2290
	Merchandise inventory		2290
	(To record cost of goods sold)
June 12	Sales return and allowance	300
	Account receivable		300
	(To record sales return)
	Merchandise inventory	230
	Cost of goods sold		230
	(To record cost of goods returned)
June 19	Cash	5664
	Sales discount	236
	Account receivable		5900
	(To record Cash received)