Question

Prepare General Journal entries to record the following perpetual system merchandising transactions ofBunbury Company. Use a separate account for each receivable and payable; for example, record the purchase on January 1 in Accounts Payable-Waterton Company.

Jan.   1    Purchased merchandise from Waterton Company for €18,000 under credit terms of 2/15, n/30, FOB shipping point. The invoice showed that Waterton paid €250 for shipping and added that to the bill. Thus, the total invoice was for €18,250.

         5    Sold merchandise to Maryland Corp. for €3,500 under credit terms of 1/10, n/45, FOB destination. The merchandise had a cost €1,700.

         9    Purchased merchandise from Walker Corporation for €8,500 under credit terms of 2/10, n/30, FOB destination.

         10 At Walker’s request, paid €350 of shipping charges on the January 9 purchase, reducing the amount owed to Walker.

         11 Paid €210 shipping charges related to the January 5 sale to Maryland Corp.

         12 Maryland returned merchandise from the January 5 sale that had cost €300 and been sold for €500. The merchandise was restored to inventory.

         13 After negotiations with Walker Corporation concerning problems with the merchandise purchased on January9, received a credit memorandum from Walker granting a price reduction of €700.

         14 Received balance due from Maryland Corp. for the January 5 sale.

         16 Purchased office equipment from BlueCo, signing a 60-day note payable for €5,300.

         17 Paid the amount due to Walker Corporation for the January9 purchase.

         18 Sold merchandise to RoseCo for €12,500 under credit terms of 2/10, n/60, FOB shipping point. The merchandise had a cost €6,200.

         21 RoseCo requested a price reduction on the January 18 sale because some of the merchandise was damaged. Sent RoseCo a credit memorandum for €1,250 to resolve the issue.

         28 Received RoseCo’s payment of the amount due from the January 18sale.

         30 Paid Waterton Company the amount due from the January 1 purchase.

Answer 1

Date	General Journal	Debit	Credit
Jan. 1	Inventory	18250
	Accounts payable-Waterton Company		18250
	(To record inventory purchased on account)
Jan. 5	Accounts receivable-Maryland Corp.	3500
	Sales revenue		3500
	(To record sales on account)
Jan. 5	Cost of goods sold	1700
	Inventory		1700
	(To record cost of goods sold)
Jan. 9	Inventory	8500
	Accounts payable-Walker Corporation		8500
	(To record inventory purchased on account)
Jan. 10	Accounts payable-Walker Corporation	350
	Cash		350
	(To record shipping charges paid)
Jan. 11	Freight out	210
	Cash		210
	(To record freight out paid)
Jan. 12	Sales returns and allowances	500
	Accounts receivable-Maryland Corp.		500
	(To record sales returns)
Jan. 12	Inventory	300
	Cost of goods sold		300
	(To record cost of sales returns)
Jan. 13	Accounts payable-Walker Corporation	700
	Inventory		700
	(To record credit memo received)
Jan. 14	Cash	2970
	Sales discounts (1% x $3000)	30
	Accounts receivable-Maryland Corp.		3000
	(To record collection on account)
Jan. 16	Office Equipment	5300
	Note payable-Blue Co.		5300
	(To record equipment purchase)
Jan. 17	Accounts payable-Walker Corporation	7450
	Inventory (2% x $7450)		149
	Cash		7301
	(To record payment on account)
Jan. 18	Accounts receivable-RoseCo	12500
	Sales revenue		12500
	(To record sales on account)
Jan. 18	Cost of goods sold	6200
	Inventory		6200
	(To record cost of goods sold)
Jan. 21	Sales returns and allowances	1250
	Accounts receivable-RoseCo		1250
	(To record credit memo sent)
Jan. 28	Cash	11025
	Sales discounts (2% x $11250)	225
	Accounts receivable-RoseCo		11250
Jan. 30	Accounts payable-Waterton Company	18250
	Cash		18250
	(To record payment on account)