Accounting for Merchandising Operations

1. On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point.

2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes.

3. On April 7, purchased equipment on account for $26,000.

4. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,000 credit for returned merchandise.

5. On April 15, paid the amount due to Wilkes Company in full.

Instructions:

(a) Prepare the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system.

(b) Assume that Kerber Co. paid the balance due to Wilkes Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

Information related to Kerber Co. is presented below. 1. On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes. 3. On April 7, purchased equipment on account for $26,000. 4. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,000 credit for returned merchandise. 5. On April 15, paid the amount due to Wilkes Company in full. Instructions: (a) Prepare the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system. (b) Assume that Kerber Co. paid the balance due to Wilkes Company on May 4 instead of April 15. Prepare the journal entry to record this payment