Cornerstone Exercise 6-26 Recording Purchase Transactions

Jeet Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April:

1. On April 1, Jeet purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225.
2. On April 1, Jeet paid freight charges of $250 cash to have the goods delivered to its warehouse.
3. On April 8, Jeet returned $800 of the merchandise. The cost of the merchandise returned was $500.
4. On April 10, Jeet paid Reece the balance due.

Assume that Jeet uses a periodic inventory system.

Required:

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1. Prepare the journal entry to record the April 1 purchase of merchandise and payment of freight by Jeet.

April 1	Accounts ReceivablePurchasesPurchase DiscountsPurchase Returns and AllowancesTransportation-In
	Accounts PayableAccounts ReceivablePurchasesPurchase Returns and AllowancesSales Revenue
	(Purchased inventory on account)
April 1	CashPurchasesPurchase DiscountsPurchase Returns and AllowancesTransportation-In
	CashCost of Goods SoldPurchasesPurchase DiscountsTransportation-In
	(Paid cash for shipping fees)

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2. Prepare the journal entry to record the April 8 return of merchandise.

April 8	Accounts PayableAccounts ReceivableCashPurchasesPurchase Returns and Allowances
	Accounts PayableCashPurchasesPurchase DiscountsPurchase Returns and Allowances		- Select -
	(Returned merchandise)

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3. Prepare the journal entry to record the April 10 payment to Reece. For those boxes in which no entry is required, leave the box blank.

April 10	Accounts PayableAccounts ReceivableCashPurchase DiscountsPurchase Returns and Allowances
	Accounts PayableCashCost of Goods SoldPurchasesTransportation-in
	Accounts PayablePurchasesPurchase DiscountsPurchase Returns and AllowancesSales Revenue
	(Recorded payment within the discount period)

Recording Purchase Transactions Jeet Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April: 2. On April 1, Jeet paid freight charges of $250 cash to have the goods delivered to its warehouse. 3. On April 8, Jeet returned $800 of the merchandise. The cost of the merchandise returned was $500. 4. On April 10, Jeet paid Reece the balance due. Assume that Jeet uses a periodic inventory system. Required: 1. Prepare the journal entry to record the April 1 purchase of merchandise and payment of freight by Jeet. 2. Prepare the journal entry to record the April 8 return of merchandise. April 8 (Returned merchandise) 3. Prepare the journal entry to record the April 10 payment to Reece. For those boxes in which no entry is required, leave the box blank. April (Recorded payment within the discount period)