Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following transactions were recorded by an inexperienced bookkeeper during the months of June and July for Wildhorse Company. Wildhorse Company uses a perpetual inventory
The following transactions were recorded by an inexperienced bookkeeper during the months of June and July for Wildhorse Company. Wildhorse Company uses a perpetual inventory system. June 10 11 12 20 A purchase of $3,500 of merchandise from DanDan Distributors was debited to Purchases and credited to Cash. The terms of the purchase were 2/10, n/30, FOB shipping point. The invoice for freight in the amount of $255 for the delivery of merchandise purchased from DanDan was paid and was debited to Delivery Expense. Damaged goods totalling $100 were returned to DanDan Distributors for credit. The bookkeeper recorded a debit to Accounts Receivable and a credit to Sales Returns and Allowances. A payment was made to DanDan Distributors for $3,500. The payment was a debit to Purchases and a credit to Cash. Wildhorse sold goods for $9,265; Sales was credited and Cost of Goods Sold was debited for this amount. The cost of the inventory sold was $3,400. The terms of the sale were 1/15, n/30, FOB destination. Freight charges on the above transaction were debited to Accounts Receivable and credited to Cash for $135. The bookkeeper believed the customer had to pay for the freight charges. Wildhorse's manager gave the customer from July 15 a $380 allowance. The entry made to record the allowance was a debit to Sales and a credit to Sales Returns and Allowances. July 15 15 17 Review each transaction below and indicate whether you agree or disagree with how the bookkeeper accounted for the transaction. June 10 11 12
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started