Question
On January 12, ABC Company purchased $10,500 of merchandise on account from XYZ, FOB shipping point, terms 3/10, n/30. ABC pays the freight costs of
On January 12, ABC Company purchased $10,500 of merchandise on account from XYZ, FOB shipping point, terms 3/10, n/30. ABC pays the freight costs of $600 on January 14. Damaged goods totaling $1,050 are returned to XYZ for credit on January 15. The fair value of these returned goods is $500. On January 18, ABC pays XYZ Company in full, less the purchase discount. Both companies use a perpetual inventory system. The merchandise purchased by ABC on January 12 had cost XYZ $5,000.
a. Prepare the Journal entries for seller XYZ for each day of transaction:
Date_____Accounting Items_______ Debit_____ Credit
b. Prepare the Journal entries for buyer ABC for each day of transaction:
Date_____Accounting Items_______ Debit_____ Credit
c. What is the final gross profit of XYZ?
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Ecology, Sustainable Development And Accounting
Authors: Seleshi Sisaye
1st Edition
0415816351, 9780415816359
