Question

Problem

NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:
DATE TRANSACTIONS
2019
June 1 Issued Check 101 to purchase merchandise, $4,000.
3 Purchased merchandise for $1,450from BioCenter Inc., Invoice 606; terms 2/10, n/30.

5 Purchased merchandise for $5,350, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30.
9 Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102.
10 Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $250 that was returned; the goods were purchased on Invoice 1011, dated June 5.
11 Purchased merchandise for $1,630 from BioCenter Inc., Invoice 612; terms 2/10, n/30.
14 Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103.
15 Purchased merchandise with a list price of $8,700 and trade discounts of 20 percent and 15 percent from Park Research, Invoice 1029, terms n/30.
20 Issued Check 104 to purchase merchandise, $2,500.
25 Returned merchandise purchased on June 20 as defective, receiving a cash refund of $230.
30 Purchased merchandise for $2700, plus a freight charge of $80, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30.
INSTRUCTIONS
Journalize the transactions in a general journal. Use 1 as the journal page number.
Analyze:
What was the amount of trade discounts received on the June 15 purchase from Park Research?

Answer 1

Journal Entries
Date	General Journal	Instrument Number	Debit	Credit
1-Jun	Purchases	101	$ 4,000.00
	Bank			$ 4,000.00
	(Merchandise Purchased)
3-Jun	Purchases	606	$ 1,450.00
	Accounts Payable			$ 1,450.00
	(Merchandise Purchased)
5-Jun	Purchases	1011	$ 5,450.00
	Accounts Payable			$ 5,450.00
	(Merchandise Purchased)
9-Jun	Accounts Payable	102	$ 1,450.00
	Bank			$ 1,421.00
	Discount Earned			$        29.00
	(Paid to Creditors)
10-Jun	Accounts Payable	1011	$     250.00
	Purchase Returns			$     250.00
	(purchase Return recorded)
11-Jun	Purchases	612	$ 1,630.00
	Accounts Payable			$ 1,630.00
	(Merchandise Purchased)
14-Jun	Accounts Payable	103	$ 5,100.00
	Bank			$ 4,998.00
	Discount Earned			$     102.00
	(Paid to Creditors)
15-Jun	Purchases	1029	$ 5,655.00
	Accounts Payable			$ 5,655.00
	(Merchandise Purchased)
20-Jun	Purchases	104	$ 2,500.00
	Bank			$ 2,500.00
	(Merchandise Purchased)
25-Jun	Cash		$     230.00
	Purchase Returns			$     230.00
	(purchase Return recorded)
30-Jun	Purchases	1080	$ 2,700.00
	Accounts Payable			$ 2,700.00
	(Merchandise Purchased)

Trade Discount on 15 June	(8700*35%)	3045
Note* Trade discount will not be recorded in books of account.