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Question: Exercise 5-4 On June 10, Tuzun Company purchased $6,650 of merchandise from Epps Company, FOB shi...

Exercise 5-4 On June 10, Tuzun Company purchased $6,650 of merchandise from Epps Company, FOB shipping point, terms 2/10, n/30. Tuzun pays the freight costs of $580 on June 11. Damaged goods totaling $350 are returned to Epps for credit on June 12. The fair value of these goods is $80. On June 19, Tuzun pays Epps Company in full, less the purchase discount. Both companies use a perpetual inventory system. Prepare separate entries for each transaction on the books of Tuzun Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date Account Titles and Explanation Debit Credit

Prepare separate entries for each transaction for Epps Company. The merchandise purchased by Tuzun on June 10 had cost Epps $5,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date Account Titles and Explanation Debit Credit

(To record credit sale) (To record cost of merchandise sold) (To record merchandise returned) (To record cost of merchandise returned) June 19

Answer 1

IN the Books of TUZUN COMPANY
DATE	ACCOUNTS TITLE AND EXPLANATION					DR. $	CR $
10-Jun	Merchandise Inventory Dr.					6650
	Accounts payable						6650
	(for purchase on account)
11-Jun	Merchandise Inventory Dr.					580
	Cash account						580
	(for frieght paid)
12-Jun	Accounts payable Dr.					350
	Merchandise Inventory						350
	(for return of goods)
19-Jun	Accounts payable Dr.					6200
	Cash account						6076
	Merchandise Inventory						124
	(for payment made in settlement)
IN the Books of EPPS COMPANY
DATE	ACCOUNTS TITLE AND EXPLANATION					DR. $	CR $
10-Jun	Acccounts recievable Dr					6650
	Sales revenue						6650
	(for sale on account)
	Cost of goods sold. Dr					5000
	Merchandise Inventory						5000
11-Jun	No entry
12-Jun	Sales revenue Dr.					350
	Accounts receivable						350
	(for return)
	Merchandise inventory Dr.					80
	Cost of goods sold						80
	(to record cost of merchandise return)
19-Jun	Cash Account Dr.					6076
	Sales discount Dr.					124
	Accounts recievable						6200