In: Accounting
The following selected transactions were completed by Betz Company during July of the current year. Betz Company uses the net method under a perpetual inventory system.
July | 1 | Purchased merchandise from Sabol Imports Co., $13,725, terms FOB destination, n/30. |
3 | Purchased merchandise from Saxon Co., $10,550, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $205 was added to the invoice. | |
5 | Purchased merchandise from Schnee Co., $12,800, terms FOB destination, 2/10, n/30. | |
6 | Issued debit memo to Schnee Co. for merchandise with an invoice amount of $4,550 returned from purchase on July 5. | |
13 | Paid Saxon Co. for invoice of July 3. | |
14 | Paid Schnee Co. for invoice of July 5, less debit memo of July 6. | |
19 | Purchased merchandise from Southmont Co., $29,160, terms FOB shipping point, n/eom. | |
19 | Paid freight of $425 on July 19 purchase from Southmont Co. | |
20 | Purchased merchandise from Stevens Co., $22,400, terms FOB destination, 1/10, n/30. | |
30 | Paid Stevens Co. for invoice of July 20. | |
31 | Paid Sabol Imports Co. for invoice of July 1. | |
31 | Paid Southmont Co. for invoice of July 19. |
Journalize the entries to record the transactions of Betz Company for July. Refer to the Chart of Accounts for exact wording of account titles.
Solution:
Journal Entries - Betz Company | |||
Date | Particulars | Debit | Credit |
1-Jul | Inventory Dr | $13,725.00 | |
To Accounts payable - Sabol Imports Co. | $13,725.00 | ||
(To record merchandise purchased on account) | |||
3-Jul | Inventory Dr | $10,755.00 | |
To Accounts payable - Saxon Co. | $10,755.00 | ||
(To record merchandise purchased on account) | |||
5-Jul | Inventory Dr | $12,800.00 | |
To Accounts payable - Schnee Co. | $12,800.00 | ||
(To record merchandise purchased on account) | |||
6-Jul | Accounts payable - Schnee Co. Dr | $4,550.00 | |
To Inventory | $4,550.00 | ||
(To record merchandise returned) | |||
13-Jul | Accounts payable - Saxon Co. Dr | $10,755.00 | |
To Cash | $10,544.00 | ||
To Inventory ($10,550*2%) | $211.00 | ||
(To record payment for accounts payable) | |||
14-Jul | Accounts payable - Schnee Co. Dr | $8,250.00 | |
To Cash | $8,085.00 | ||
To Inventory ($8,250*2%) | $165.00 | ||
(To record payment for accounts payable) | |||
19-Jul | Inventory Dr | $29,160.00 | |
To Accounts payable - Southmont Co | $29,160.00 | ||
(To record merchandise purchased on account) | |||
19-Jul | Inventory Dr | $425.00 | |
To Cash | $425.00 | ||
(To record freight payment) | |||
20-Jul | Inventory Dr | $22,400.00 | |
To Accounts payable - Stevens Co. | $22,400.00 | ||
(To record merchandise purchased on account) | |||
30-Jul | Accounts payable - Stevens Co. Dr | $22,400.00 | |
To Cash | $22,176.00 | ||
To Inventory ($22,400*1%) | $224.00 | ||
(To record payment for accounts payable) | |||
31-Jul | Accounts payable - Sabol Imports Co. Dr | $13,725.00 | |
To Cash | $13,725.00 | ||
(To record payment for accounts payable) | |||
31-Jul | Accounts payable - Southmont Co Dr | $29,160.00 | |
To Cash | $29,160.00 | ||
(To record payment for accounts payable) |