(1) Journalize the August transactions for Summit Company.

General Journal Instructions

Question not attempted.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 0/326

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY

Points:

0 / 65

Check My Work

General hint: Journalize Summit Company transactions from the seller's point of view.

Aug. 1:

Seller Note that FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the Sale on account and (2) for the Cost of the Merchandise Sold and Inventory decrease on the seller's records.

Aug. 2:

Seller - Freight expense increases the Cost of the Merchandise. However, freight is typically prepaid in cash. There is no mention in the problem of adding this cost to the buyer's invoice.

Aug. 5:

Seller - Two entries are required for (1) the Sale on account and (2) the Cost of the Merchandise Sold and Inventory decrease on the seller's records.

Aug. 9:

Seller Not applicable.

General hint: FOB shipping point freight is the buyer's cost, while FOB destination freight is the seller's expense.

Aug. 15:

Seller - Two entries are required for (1) the Sale on account and (2) the Cost of the Merchandise Sold and Inventory decrease on the seller's records.

Aug. 16:

Seller - Since the invoice was paid within the discount period, the seller debits Cash and credits Accounts Receivable for the discounted amount.

Aug. 20:

Seller - Since the invoice was paid within the discount period, the seller debits Cash and credits Accounts Receivable for the discounted amount.

Aug. 31:

Seller - Since no discount was offered, no discounts are recorded. The cash paid on account is in each case is equal to the invoice and reduces the Accounts Receivable for the seller and the Accounts Payable for the buyer.