Question
Prepare journal entries to record the following merchandising transactions of Blink Company, which applies the perpetual inventory system. ( Hint: It will help to identify
Prepare journal entries to record the following merchandising transactions of Blink Company, which applies the perpetual inventory system. (Hint: It will help to identify each receivable and payable: for example, record the purchase on July 1 in Accounts PayableBoden).
July 1: Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
July 2: Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $500.
July 3: Paid $125 cash for freight charges on the purchase of July 1.
July 8: Sold merchandise that had cost $1,300 for $1,700 cash.
July 9: Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
July 11: Received a $200 credit memorandum (memo) from Leight Co. for the return of part of the merchandise purchased on July 9.
July 12: Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.
July 16: Paid the balance due to Boden Co. within the discount period.
July 19: Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
July21: Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on July 19.
July 24: Paid Leight Co. the balance due after deducting the discount.
July 30: Received the balance due from Art Co. for the invoice dated July 19, net of discount.
July 31: Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.
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