Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Ex. 5-7 Exercise 5-7 Analyzing and recording merchandise transactions-perpetual LO3 On May 11, 2020, Wilson Purchasing purchased $23,000 of merchandise from Happy Sales; terms 2/10,
Ex. 5-7
Exercise 5-7 Analyzing and recording merchandise transactions-perpetual LO3 On May 11, 2020, Wilson Purchasing purchased $23,000 of merchandise from Happy Sales; terms 2/10, n/90, FOB Happy Sales. The cost of the goods to Happy was $18,000. Wilson paid $1,300 to Express Shipping Service for the delivery charges on the merchandise on May 11. On May 12, Wilson returned $3,600 of goods to Happy Sales, which restored them to inventory. The returned goods had cost Happy $2,800. On May 20, Wilson mailed a cheque to Happy for the amount owed on that date. Happy received and recorded the cheque on May 21. Required a. Present the journal entries that Wilson Purchasing should record for these transactions. Assume thay Wilson uses a perpetual inventory system. b. Present the journal entries that Happy Sales should record for these transactions. Assume that Happy used a perpetual inventory system. Analysis Component: Assume that the buyer, Wilson Purchasing, borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 4% and paid it back on the last day of the credit period. Calculate how much the buyer saved by following this strategy. Use a 365 -day year and round oll calculations to the nearest whole cent Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started