Pete's Bikes purchased 60 bikes at $75 each with terms of 4/10, n/30 from Speedsters on...

Pete's Bikes purchased 60 bikes at $75 each with terms of 4/10, n/30 from Speedsters on July 10. These bikes had a cost of $45 each to Speedsters. On July 12, Pete's bikes returned 8 bikes. On July 15, Pete's Bikes paid the balance owed less the return and discount.

a) Prepare all required entries for Pete's Bikes (buyer).

Date	Description	Debit	Credit
10-Jul


12-Jul


15-Jul

b) Prepare all required entries for Speedsters (seller).

Date	Description	Debit	Credit
10-Jul





12-Jul





15-Jul

Solutions

Expert Solution

Journal entry for Pete's Bikes (buyer) :

Date	General journal	debit	credit
July 10	Merchandise inventory (60*75)	4500
	Account payable		4500

July 12	Account payable (8*75)	600
	Merchandise inventory		600

July 15	Account payable	3900
	Cash		3744
	Merchandise inventory (3900*4%)		156

Journal entry for Speedsters (seller).

Date	General journal	debit	credit
July 10	Account receivable	4500
	Sales revenue		4500
	Cost of goods sold (60*45)	2700
	Merchandise inventory		2700

July 12	Sales return and allowance (8*75)	600
	Account receivable		600
	Merchandise inventory	360
	Cost of goods sold		360

July 15	Cash	3744
	Sales discount	156
	Account receivable (4500-600)		3900

ekkarill92 answered 9 months ago

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