The following transactions for Liberty Tire, Co., occurred during October:

Requirements 1. Journalize the transactions on the books of Liberty Tire, Co.
2. What was Liberty Tire’s gross profit for the month of October?

Transcribed Image Text:

Oct 4 Purchased $5,900 of merchandise on account from Firerock Tire. Terms, 2/15, n/45, FOB shipping point. Firerock Tire prepaid the $300 shipping cost and added the amount to the invoice. 7 Purchased $350 of supplies on account from OfficeMaxx. Terms, 2/10, n/30, FOB destination. 11 9 Sold $950 (cost, $500) of merchandise on account to L. Simpson. Terms, 3/15, n/45, FOB destination. 13 15 Paid $75 freight charges to deliver goods to L. Simpson. Returned $1,400 of the merchandise purchased on October 4 and received a credit. Sold $650 (cost, $350) of merchandise to cash customers. 16 Paid for the supplies purchased on October 7. 18 Paid Firerock Tire the amount due from the October 4 purchase in full. 20 L. Simpson returned $175 (cost, $100) of merchandise from the October 9 sale. 22 Purchased $2,100 of inventory. Paid cash. 23 Received payment in full from L. Simpson for the October 9 sale.