Question
Set #3Chapter 5 MerchandisingPurchaser/Buyer Question 1: Information for Olaf Co. follows: Apr. 5 Purchased merchandise from DeVito Company for $15,000, terms, 2/10, n/30, FOB shipping
Set #3Chapter 5 MerchandisingPurchaser/Buyer
Question 1:
Information for Olaf Co. follows:
Apr. 5 Purchased merchandise from DeVito Company for $15,000, terms, 2/10, n/30, FOB shipping point.
6 The correct company paid freight costs of $900.
7 Purchased supplies for $2,600 cash.
8 Returned damaged merchandise to DeVito Company and was given a $3,000 purchase allowance.
May 2 Paid the amount due to DeVito Company in full.
Instructions
(. a) Prepare the journal entries to record these transactions on the books of Olaf Co., assuming a perpetual inventory system is used.
(. b) What is the balance in the Merchandise Inventory account after recording these transactions?
(. c) Assume that Olaf Co. paid DeVito in full on April15 instead of May 2. Record this journal entry. What would the balance in the Merchandise I. inventory account be using this assumption?
(a)
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(b)
(c)
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Financial Accounting
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, Maureen Sterling
7th Canadian Edition
1260065952, 978-1260065954
