P5-2A

5.lA. Journal Entries for Merchandise Transactions on Seller's and Buyer's Books-Perpetual SystemLo2 PS-IA PROBLEMS-SET A The following transactions occurred between the Decker Company and Mann Stores, Inc., during March: Mar. 8 Decker sold $14,000 worth of merchandise ($9,600 cost) to Mann Stores with terms of 2/10, n/30. 10 Mann Stores paid freight charges on the shipment from Decker Company. $500. 12 Mann Stores returned $2,000 of the merchandise ($1.600 cost) shipped on March 8. 17 20 Decker received full payment for the net amount due from the March 8 sale. Mann Stores returned goods that had been billed originally at $800 ($600 cost). Decker issued a check for $784. Required Prepare the necessary journal entries for (a) the books of Decker Company and (b) the books of Mann Stores, Inc. Assume that both companies use the perpetual inventory system which Loa P52A. Journal Entries for Merchandise Transactions-Perpetual System Rockford Corporation. began business on August I, sells on terms of 2/10, n/30. Credit terms for its purchases vary with the supplier. Selected and involve merchandise held for resale. The perpetual inventory system is used. transactions for August are given below. Unless noted, all transactions are on account 1 Purchased merchandise from Norris, Inc., $4,000, terms 2/10, n/30. 5 Paid freight on shipment from Norris, Inc., $220. 7 Sold merchandise to Denton Corporation, $5,500 ($4,100 cost),. 7 Paid $300 freight on August 7 shipment and billed Denton for the charges. 9 Returned $800 worth of the merchandise purchased August 1 from Norris, Inc., because Aug. it was defective. Norris approved the return 9 Received $750 of returned merchandise ($500 cost) from Denton Corporation. Rockfond approved the return. 10 Paid Noris, Inc., the amount duc. 14 Purchased from Chambers, Inc., goods with a price of $9,000. Terms 1/10, n/30. 15 Paid freight on shipment from Chambers, Inc. $320. 17 Received the amount due from Denton Corporation. 18 Sold merchandise to Weber, Inc.. $9,600 ($6,600 cost). 20 Paid $350 freight on August 18 shipment and billed Weber for the charges. 24 Paid Chambers, Inc., the amount due. 28 Received the amount due from Weber, Inc. Required Prepare journal entries for these transactions for Rockford Corporation. A. Effecds of Transactions on the Inventory Account-Perpetual System Watt Wholesale Company Lo purchases merchandise from a variety of manufacturers and sells the merchandise to a variety of re- tailers. All sales are subject to a cash discount (2/10, n/ The May 1 balance in Watt's Inventory account was a $70,000 debit. The following transactions oc curred during May: 30). Watt uses a perpetual inventory system. May 2 Purchased $5,500 of merchandise from Ajax Manufacturing: terms are 1/10, n/30. 4 Paid $200 freight on the May 2 purchase. 12 Paid Ajax for the May 2 purchase. 14 Purchased $4,000 of merchandise from Baker Manufacturing: terms are 2/10, p/45 16 Received a $300 allowance on the May 14 purchase since some of the merchandise was the wrong color. All of the merchandise is salable at regular prices