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Prepare journal entries to record the following merchandising transactions of Griffin's, which uses the perpetual inventory system and the gross method. (Hint: It will
Prepare journal entries to record the following merchandising transactions of Griffin'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-Garcia.) July 1 Purchased merchandise from Garcia Company for $9,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. July 2 Sold merchandise to Thompson Company for $2,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $1,440. July 3 Paid $725 cash for freight charges on the purchase of July 1. July 8 Sold merchandise that had cost $2,800 for $4,700 cash. July 9 Purchased merchandise from Perry Company for $3,700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11 Returned $700 of merchandise purchased on July 9 from Perry Company and debited its account payable for that amount. July 12 Received the balance due from Thompson Company for the invoice dated July 2, net of the discount. July 16 Paid the balance due to Garcia Company within the discount period. July 19 Sold merchandise that cost $2,900 to Brown Company for $4,200 under credit terms of 2/15, n/60, FOS shipping point, invoice dated July 19. July 21 Gave a price reduction (allowance) of $800 to Brown Company for merchandise sold on July 19 and credited Brown's accounts receivable for that amount. July 24 Paid Perry Company the balance due, net of discount. July 30 Received the balance due from Brown Company for the invoice dated July 19, net of discount. July 31 Sold merchandise that cost $6,000 to Thompson Company for $10,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.
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