GL0401 (Algo)- Base on Problem 4-1A LO P1,P2

Impact on Income

GL0401 (Algo) - Based on Problem 4-1A LO P1, P2 Prepare journal entries to record the following merchandising transactions of Wright's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable-Martin.) July 1 Purchased merchandise from Martin Company for $9,698 under credit terms of 1/15, 1/30, FOB shipping point, July 2 Sold merchandise to Clark Company for $2,700 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 2. The merchandise had cost $1,620. July 3 Paid $845 cash for freight charges on the purchase of July 1. July 8 Sold merchandise that had cost $3,200 for $5,300 cash. July 9 Purchased merchandise from Mitchell Company for $4,000 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11 Returned $800 of merchandise purchased on July 9 from Mitchell Company and debited its account payable for that amount. July 12 Received the balance due from Clark Company for the invoice dated July 2, net of the discount. July 19 Sold merchandise that cost $3,400 to Gonzalez Company for $4,882 under credit terms of 2/15, n/60, FOB shipping July 21 Gave a price reduction allowance) of $1,000 to Gonzalez Company for merchandise sold on July 19 and credited Gonzalez's accounts receivable for that amount. July 24 Paid Mitchell Company the balance due, net of discount. July 30 Received the balance due from Gonzalez Company for the invoice dated July 19, net of discount. July 31 Sold merchandise that cost $6,488 to Clark Company for $10,600 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. Answer is complete but not entirely correct. General General Schedule of Income Schedule of Impact on Trial Balance Requirement Journal Ledger Receivables Payables Statement Income For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as minus sign. Upon completion, compare the gross profit with the amount reported on the partial income statement. Impact on Income Increase (decrease) to income No impact on income 0 July 1) Purchased merchandise from Martin Company for $9,600 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. July 2) Sold merchandise to Clark Company for $2,700 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 2 July 2) The cost of the merchandise sold to Clark Increases net income $ 2,700 Narance na inanma R21 Impact on income Increase (decrease) to income No impact on income 0 Increases net income 2,700 July 1) Purchased merchandise from Martin Company for $9,600 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. July 2) Sold merchandise to Clark Company for $2,700 under credit terms of 2/10, 1/60, FOB shipping point invoice dated July 2 July 2) The cost of the merchandise sold to Clark Company was $1,620. July 3) Paid $845 cash for freight charges on the purchase of July 1. July 8) Sold merchandise for $5,300 cash. Decreases net income (1,620) No impact offincome 0 Increases net income 5,300 Decreases net income (3,200) No impact on income 0 No impact on income 0 Decreases net income (54) No impact on income 0 July 8) The cost of the merchandise sold was $3,200. July 9) Purchased merchandise from Mitchell Company for $4,000 under credit terms of 2/15, 1/60, FOB destination, invoice dated July 9. July 11) Received a $800 credit memorandum from Mitchell Company for the return of part of the merchandise purchased on July 9. July 12) Received the balance due from Clark Company for the invoice dated July 2, net of the discount July 16) Paid the balance due to Martin Company within the discount period July 19) Sold merchandise to Gonzalez Company for $4,800 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 19) The cost of the merchandise sold to Gonzalez Company was $3,400. July 21) Issued a $1,000 credit memorandum to Gonzalez Company for an allowance on goods sold on July 19. July 24) Paid Mitchell Company the balance due, net of discount July 30) Received the balance due from Gonzalez Company for the invoice dated July 19, net of discount. July 31) Sold merchandise to Clark Company for $10,600 under credit terms of 2/10, 1/60, FOB shipping Increases net income 4,800 Decreases net income (3.400) Decreases net income (1,000) No impact on income 0 Decreases net income (96) Increases net income 10,600 A la al...4