Question

Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System The following selected transactions were completed during August between Summit Company and Beartooth Co.: Aug. 1. Summit Company sold merchandise on account to Beartooth Co., $49,400, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $27,190. 2. Summit Company paid freight of $1,125 for delivery of merchandise sold to Beartooth Co. on August 1. 5. Summit Company sold merchandise on account to Beartooth Co., $72,380, terms FOB shipping point, n/eom. The cost of the goods sold was $42,200. 9. Beartooth Co. paid freight of $2,110 on August 5 purchase from Summit Company. 15. Summit Company sold merchandise on account to Beartooth Co., $54,000, terms FOB shipping point, 1/10, n/30. Summit paid freight of $1,510, which was added to the invoice. The cost of the goods sold was $36,870. 16. Beartooth Co. paid Summit Company for purchase of August 1. 25. Beartooth Co. paid Summit Company on account for purchase of August 15. 31. Beartooth Co. paid Summit Company on account for purchase of August 5.

Required: 1. Journalize the August transactions for Beartooth Co. (the buyer). Date Account Debit Credit Aug. 1 Inventory Accounts Payable-Summit Company Date Account Debit Credit Aug. 5 Inventory Accounts Payable-Summit Company Date Account Debit Credit Aug. 9 Inventory Cash Date Account Debit Credit Aug. 15 Inventory Accounts Payable-Summit Company Date Account Debit Credit Aug. 16 Accounts Payable-Summit Company Cash Date Account Debit Credit Aug. 25 Accounts Payable-Summit Company Cash Date Account Debit Credit Aug. 31 Accounts Payable-Summit Company Cash 2. Journalize the August transactions for Summit Company (the seller). Date Account Debit Credit

  

Answer 1

1

Journalize the August transactions for Beartooth Co. (the buyer).

Date	Description	Debit $	Credit $
August
1	Merchandise Inventory	49400
	Accounts Payable—Summit Company		49400
5	Merchandise Inventory	72380
	Accounts Payable—Summit Company		72380
9	Merchandise Inventory	2110
	Cash		2110
15	Merchandise Inventory	55510
	Accounts Payable—Summit Company		55510
	(54000+1510)
16	Accounts Payable—Summit Company	49400
	Cash (49400*98%)		48412
	Merchandise Inventory(49400*2%)		988
25	Accounts Payable—Summit Company	55510
	Cash (55510-540)		54970
	Merchandise Inventory(54000*1%)		540
31	Accounts Payable—Summit Company	72380
	Cash		72380

________________________________________________________

2

Journalize the August transactions for Summit Company (the seller)

Date	Description	Debit $	Credit $
August
1	Accounts Receivable—Beartooth Co.	49400
	Sales		49400
1	Cost of Merchandise Sold	27190
	Merchandise Inventory		27190
2	Delivery Expense	1125
	Cash		1125
5	Accounts Receivable—Beartooth Co.	72380
	Sales		72380
5	Cost of Merchandise Sold	42200
	Merchandise Inventory		42200
15	Accounts Receivable—Beartooth Co.	54000
	Sales		54000
15	Accounts Receivable—Beartooth Co.	1510
	Cash		1510
15	Cost of Merchandise Sold	36870
	Merchandise Inventory		36870
16	Cash (49400*2%)	48412
	Sales Discounts (49400*2%)	988
	Accounts Receivable—Beartooth Co.		49400
25	Cash (55510-1080)	54970
	Sales Discounts(54000*1%)	540
	Accounts Receivable—Beartooth Co.		55510
31	Cash	72380
	Accounts Receivable—Beartooth Co.		72380