Question

 Provide the solution that is required, making sure to demonstrate how you obtained the answer. 

4) Bascomb Company purchased $420,000 in merchandise on account during the month of April, and merchandise costing $350,000 was sold on account for $425,000.

 Required:

 1. Prepare journal entries to record the purchases and sales assuming Bascomb uses a perpetual inventory system.

 2. Prepare journal entries to record the purchases and sales assuming Bascomb uses a periodic inventory system.

 5) Meteor Co. purchased merchandise on March 4, 2018, at a price of $30,000, subject to credit terms of 2/10, n/30. Meteor uses the net method for recording purchases and uses a periodic inventory system.

Answer 1

4)1) Journal entry

Date	account and explanation	Debit	Credit
	Merchandise inventory	420000
	Account payable		420000
	(To record purchase)
	Account receivable	425000
	Sales revenue		425000
	(To record sales)
	Cost of goods sold	350000
	Merchandise inventory		350000
	(To record cost of goods sold)

4)2) Journal entry

Date	account and explanation	Debit	Credit
	Purchase	420000
	Account payable		420000
	(To record purchase)
	Account receivable	425000
	Sales revenue		425000
	(To record sales)

5) Journal entry

No	Account and explanation	Debit	Credit
Mar 4	Purchase (30000*98%)	29400
	Account payable		29400
	(To record purchase)
Mar 11	Account payable	29400
	Cash		29400
	(To record payment)
Apr 2	Account payable	29400
	Purchase discount forfeited	600
	Cash		30000
	(To record amount paid)