Purchase Transactions and T Accounts

Using T accounts for Cash, Accounts Payable, Purchases, Purchases Returns and Allowances, Purchases Discounts, and Freight-In, enter the following purchase transactions. Identify each transaction with its corresponding letter.

1. Purchase of merchandise with cash. Post the transactions in the given order.

Merchandise is purchased for cash, $2,400.

Merchandise listed at $3,800, less a trade discount of 10%, is purchased for cash.

Cash
		(a)(b)	fill in the blank 2
		(a)(b)	fill in the blank 4

Purchases
(a)(b)	fill in the blank 6
(a)(b)	fill in the blank 8

2. Purchase of merchandise on account with credit terms.

Merchandise is purchased on account, credit terms 2/10, n/30, $3,800.

Merchandise is purchased on account, credit terms 3/10, n/30, $3,000.

Payment is made on invoice (a) within the discount period.

Payment is made on invoice (b) too late to receive the cash discount.

Cash
		(a)(b)(c)	fill in the blank 10
		(a)(b)(d)	fill in the blank 12

Accounts Payable
(a)(b)(c)	fill in the blank 14	(a)(c)(d)	fill in the blank 16
(a)(b)(d)	fill in the blank 18	(b)(c)(d)	fill in the blank 20

Purchases
(a)(c)(d)	fill in the blank 22
(b)(c)(d)	fill in the blank 24

Purchases Discounts
		(a)(b)(c)(d)	fill in the blank 26

3. Purchase of merchandise on account with return of merchandise.

Merchandise is purchased on account, credit terms 2/10, n/30, $5,600.

Merchandise is returned for credit before payment is made, $600.

Payment is made within the discount period.

Cash
		(a)(b)(c)	fill in the blank 28

Accounts Payable
(a)(b)	fill in the blank 30	(a)(b)(c)	fill in the blank 32
(a)(c)	fill in the blank 34

Purchases
(a)(b)(c)	fill in the blank 36

Purchases Returns and Allowances
		(a)(b)(c)	fill in the blank 38

Purchases Discounts
		(a)(b)(c)	fill in the blank 40

4. Purchase of merchandise with freight-in.

Merchandise is purchased on account, $3,900 plus freight charges of $250. Terms of the sale were FOB shipping point.

Payment is made for the cost of merchandise and the freight charge.

Cash
		(a)(b)	fill in the blank 42

Accounts Payable
(a)(b)	fill in the blank 44	(a)(b)	fill in the blank 46

Purchases
(a)(b)	fill in the blank 48

Freight-In
(a)(b)	fill in the blank 50

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