Question

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

Apr.2.	Swan Company sold merchandise on account to Bird Company, $18,400, terms FOB shipping point, 1/10, n/30. Swan Company paid freight of $400, which was added to the invoice. The cost of the merchandise sold was $11,600.
8.	Swan Company sold merchandise on account to Bird Company, $23,000, terms FOB destination, 2/15, n/30. The cost of the merchandise sold was $13,800.
8.	Swan Company paid freight of $730 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, $9,400, terms FOB shipping point, n/45. The cost of the merchandise sold was $5,600.
26.	Bird Company paid freight of $330 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).

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

Answer 1

Answer 1.
Bird Company
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
2-Apr	Inventory	18,800.00
	Accounts Payable - Swan Company		18,800.00
	(record the purchases)
8-Apr	Inventory	23,000.00
	Accounts Payable - Swan Company		23,000.00
	(record the purchases)
12-Apr	Accounts Payable - Swan Company	18,800.00
	Cash		18,616.00
	Inventory		184.00
	(record the cash paid)
18-Apr	Cash	2,000.00
	Inventory		2,000.00
	(record the cash recd for defective inventory)
23-Apr	Accounts Payable - Swan Company	23,000.00
	Cash		22,540.00
	Inventory		460.00
	(record the cash paid)
24-Apr	Inventory	9,400.00
	Accounts Payable - Swan Company		9,400.00
	(record the purchases)
26-Apr	Inventory	330.00
	Cash		330.00
	(record the freight paid)
30-Apr	Accounts Payable - Swan Company	11,300.00
	Merchandise Inventory		11,300.00
	(record the purcahse return)

Answer 2.
Swan Company
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
2-Apr	Accounts Receivable - Bird Company	18,400.00
	Sales		18,400.00
	(To record the sales to Bird Company)
2-Apr	Accounts Receivable - Bird Company	400.00
	Cash		400.00
	(record the freight paid)
2-Apr	Cost of Goods Sold	11,600.00
	Inventory		11,600.00
	(Record the cost of goods sold)
8-Apr	Accounts Receivable - Bird Company	23,000.00
	Sales		23,000.00
	(To record the sales to Bird Company)
8-Apr	Cost of Goods Sold	13,800.00
	Inventory		13,800.00
	(Record the cost of goods sold)
8-Apr	Delivery Expense	730.00
	Cash		730.00
	(To record the delivery expense)
12-Apr	Cash	18,616.00
	Sales Discount (18,400 x 1%)	184.00
	Accounts Receivable - Bird Company		18,800.00
	(record the cash received)
18-Mar	Sale Return & Allowances	2,000.00
	Cash		2,000.00
	(Record the cash paid for defective material)
23-Apr	Cash	22,540.00
	Sales Discount (23,000 x 2%)	460.00
	Accounts Receivable - Bird Company		23,000.00
	(record the cash received)
24-Apr	Accounts Receivable - Bird Company	9,400.00
	Sales		9,400.00
	(To record the sales to Bird Company)
24-Apr	Cost of Goods Sold	5,600.00
	Inventory		5,600.00
	(Record the cost of goods sold)
30-Apr	Sales return & Allowances	11,300.00
	Accounts Receivable - Bird Company		11,300.00
	(record the sales return)
30-Apr	Merchandise Inventory	6,500.00
	Cost of Goods Sold		6,500.00
	(record the cost of goods sold of return)