Question

Sanyo White Goods LLC is a dealer of a variety of white goods. It sells to various retailers throughout the country. During the month of March, 2019, the following transactions took place.

1.      On 1 March, 2019, Sanyo White Goods LLC purchases $120,000 of merchandise from Samsung plc. A trade discount of $20,000 was available with a further 10% cash discount if payment were made within 10 days and  shipping terms FOB  Destination

2.      On 1 March, 2019, Sanyo White Goods LLC purchases $20,000 of merchandise  from Daewoo plc with a trade discount of 20% for Cash.

3.      On 17 March, 2019, Sanyo White Goods LLC   returns goods worth $15,000 to Samsung plc.

4.      On 20 March, 2019, Sanyo White Goods LLC   makes the final payment from Samsung plc for the transaction of 1 March 2019.

5.      On 20 March, 2019, Samsung plc pays Freight Charges of $600.

Required:

a)        Pass the necessary Journal Entries in the books of Sanyo White Goods LLC to record each of the above transactions.

b)        Pass the necessary Journal Entries in the books of Samsung plc to record each of the above transactions.

Answer 1

Journal entries in the books of Sanyo
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Merchandise inventory		1,00,000
	Accounts payable-Samsung			1,00,000
	(for purchase of inventory)
b.	Merchandise inventory		18000
	Accounts payable				18,000
	(for purchase of inventory)
c.	Accounts payable-Samsung		15,000
	Merchandise inventory			15000
	(for return)
d.	Accounts payable-Samsung		85000
	Cash account				85000
	(for payment made after discount period)
e.	No entry
Journal entries in the books of Samsung
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Accounts receivable-Sanyo		1,00,000
	Sales revenue				1,00,000
	(for sales of goods)
b.	No entry
c.	Sales return			15,000
	Accounts receivable-Sanyo			15000
	(for sales return)
d.	Cash account			85000
	Accounts receivable-Sanyo			85000
	(for payment made after discount period)
e.	Freight out expense			600
	Cash account				600
	(for freight expenses incurred)