Question

The following selected transactions were completed during August between Summit Company and Beartooth Co.:

Aug.	1	Summit Company sold merchandise on account to Beartooth Co., $52,150, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $25,940.
	2	Summit Company paid freight of $1,235 for delivery of merchandise sold to Beartooth Co. on August 1.
	5	Summit Company sold merchandise on account to Beartooth Co., $60,090, terms FOB shipping point, n/eom. The cost of the goods sold was $36,900.
	9	Beartooth Co. paid freight of $2,140 on August 5 purchase from Summit Company.
	15	Summit Company sold merchandise on account to Beartooth Co., $62,600, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of $1,515, which was added to the invoice. The cost of the goods sold was $32,600.
	16	Beartooth Co. paid Summit Company for purchase of August 1.
	25	Beartooth Co. paid Summit Company on account for purchase of August 15.
	31	Beartooth Co. paid Summit Company on account for purchase of August 5.

Answer 1

SOLUTION:

1) Summit Company

Aug.	1	Accounts Receivable—Beartooth Co.	52,150
		Sales		52,150
	1	Cost of Merchandise Sold	25,940
		Merchandise Inventory		25,940
	2	Delivery Expense	1,235
		Cash		1,235
	5	Accounts Receivable—Beartooth Co.	60,090
		Sales		60,090
	5	Cost of Merchandise Sold	36,900
		Merchandise Inventory		36,900
	15	Accounts Receivable—Beartooth Co.	62,600
		Sales		62,600
	15	Accounts Receivable—Beartooth Co.	1515
		Cash		1515
	15	Cost of Merchandise Sold	32,600
		Merchandise Inventory		32,600
	16	Cash	51107
		Sales Discounts	1043
		Accounts Receivable—Beartooth Co.		52150
	25	Cash	63489
		Sales Discounts	626
		Accounts Receivable—Beartooth Co.		64115
	31	Cash	60,090
		Accounts Receivable—Beartooth Co.		60,090

2) Beartooth Co.

Aug.	1	Merchandise Inventory	52,150
		Accounts Payable—Summit Company		52,150
	5	Merchandise Inventory	60,090
		Accounts Payable—Summit Company		60,090
	9	Merchandise Inventory	2,140
		Cash		2,140
	15	Merchandise Inventory	64115
		Accounts Payable—Summit Company		64115
	16	Accounts Payable—Summit Company	52150
		Cash		51107
		Merchandise Inventory		1043
	25	Accounts Payable—Summit Company	64,115
		Cash		63489
		Merchandise Inventory		626
	31	Accounts Payable—Summit Company	60,090
		Cash		60,090