Question

Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System

The following selected transactions were completed during April between Swan Company and Bird Company:

Apr.2.	Swan Company sold merchandise on account to Bird Company, $18,600, terms FOB shipping point, 1/10, n/30. Swan Company paid freight of $265, which was added to the invoice. The cost of the merchandise sold was $11,700.
8.	Swan Company sold merchandise on account to Bird Company, $31,000, terms FOB destination, 2/15, n/30. The cost of the merchandise sold was $18,600.
8.	Swan Company paid freight of $460 for delivery of merchandise sold to Bird Company on April 8.
12.	Bird Company paid Swan Company for purchase of April 2.
18.	Swan Company paid Bird Company a refund of $2,000 for defective merchandise in the April 2 purchase. Bird Company agreed to keep the merchandise.
23.	Bird Company paid Swan Company for purchase of April 8.
24.	Swan Company sold merchandise on account to Bird Company, $14,200, terms FOB shipping point, n/45. The cost of the merchandise sold was $8,500.
26.	Bird Company paid freight of $250 on April 24 purchase from Swan Company.
30.	Swan Company granted a customer allowance (credit memo) to Bird Company for $11,300 for merchandise that was returned from the August 24 purchase. The cost of the merchandise returned was $6,500.

Required:

1. Journalize the April transactions for Bird Company (the buyer).

Date	Account	Debit	Credit
Apr. 2

Date	Account	Debit	Credit
Apr. 8

Date	Account	Debit	Credit
Apr. 12-payment

Date	Account	Debit	Credit
Apr. 18

Date	Account	Debit	Credit
Apr. 23

Date	Account	Debit	Credit
Apr. 24

Date	Account	Debit	Credit
Apr. 26

Date	Account	Debit	Credit
Apr. 30

2. Journalize the April transactions for Swan Company (the seller).

Date	Account	Debit	Credit
Apr. 2-sale

Date	Account	Debit	Credit
Apr. 2-freight

Date	Account	Debit	Credit
Apr. 2-cost

Date	Account	Debit	Credit
Apr. 8-sale

Date	Account	Debit	Credit
Apr. 8-cost

Date	Account	Debit	Credit
Apr. 8-freight

Date	Account	Debit	Credit
Apr. 12-collection

Date	Account	Debit	Credit
Apr. 18

Date	Account	Debit	Credit
Apr. 23

Date	Account	Debit	Credit
Apr. 24-sale

Date	Account	Debit	Credit
Apr. 24-cost

Date	Account	Debit	Credit
Apr. 30

Date	Account	Debit	Credit
Apr. 30

Answer 1

1)	JOURNAL ENTRIES FOR BIRD COMPANY--BUYER
Date	Account	Debit	Credit
Apr. 2	Merchandise inventory	18865
	Accounts payable-Swan Company		18865
Date	Account	Debit	Credit
Apr. 8	Merchandise inventory	31000
	Accounts payable-Swan Company		31000
Date	Account	Debit	Credit
Apr. 12-payment	Accounts payable-Swan Company	18865
	Merchandise inventory (18865*1%)		189
	Cash		18676
Date	Account	Debit	Credit
Apr. 18	Cash	2000
	Inventory		2000
Date	Account	Debit	Credit
Apr. 23	Accounts payable-Swan Company	31000
	Merchandise inventory (31000*2%)		620
	Cash		30380
Date	Account	Debit	Credit
Apr. 24	Merchandise inventory	14200
	Accounts payable-Swan Company		14200
Date	Account	Debit	Credit
Apr. 26	Merchandise inventory	250
	Cash		250
Date	Account	Debit	Credit
Apr. 30	Accounts payable-Swan Company	11300
	Merchandise inventory		11300
	JOURNAL ENTRIES FOR SWAN COMPANY--SELLER
Date	Account	Debit	Credit
Apr. 2-sale	Accounts receivable-Bird Company	18600
	Sales		18600
Date	Account	Debit	Credit
Apr. 2-freight	Accounts receivable-Bird company	265
	Cash		265
Date	Account	Debit	Credit
Apr. 2-cost	Cost of goods sold	11700
	Merchandise inventory		11700
Date	Account	Debit	Credit
Apr. 8-sale	Accounts Receivable-Bird Company	31000
	Sales		31000
Date	Account	Debit	Credit
Apr. 8-cost	Cost of goods sold	18600
	Merchandise inventory		18600
Date	Account	Debit	Credit
Apr. 8-freight	Carriage outwards	460
	Cash		460
Date	Account	Debit	Credit
Apr. 12-collection	Cash	18676
	Cash discount allowed		189
	Accounts receivable-Bird Company		18865
Date	Account	Debit	Credit
Apr. 18	Sales returns and allowances	2000
	Cash		2000
Date	Account	Debit	Credit
Apr. 23	Cash	30380
	Cash discount allowed	620
	Accounts receivable		31000
Date	Account	Debit	Credit
Apr. 24-sale	Accounts receivable-Bird Company	14200
	Sales		14200
Date	Account	Debit	Credit
Apr. 24-cost	Cost of goods sold	8500
	Merchandise inventory		8500
Date	Account	Debit	Credit
Apr. 30	Sales returns and allowances	11300
	Accounts receivable-Bird Company		11300
Date	Account	Debit	Credit
Apr. 30	Merchandise inventory	6500
	Cost of goods sold		6500