The Jewel Box purchases jewellery from around the world and sells to local retailers in Canada. Consider the following perpetual system merchandising transactions of The Jewel Box. Use a separate account for each receivable and payable, for example, record the purchase on August 1 in Accounts Payable --Luu Company. Aug. 1 Purchased necklaces from Luu Company for $4,400 under credit terms of 3/10, n/30, FOB destination. At Luu Company's request, paid $390 for freight charges on the August 1 purchase, reducing the amount owed to Luu. 5 Sold rings to Green Ruby for $4,040 under credit terms of 3/10,n/60, FOB destination. The merchandise had cost $2,670. 8 Purchased bracelets from Jane Co. for $5,600 under credit terms of 1/10, n/45, FOB shipping point. 9 Paid $365 shipping charges related to the August 5 sale to Green Ruby. 10 Green Ruby returned the rings purchased from the August 5 sale that had cost $480 and been sold for $840. The merchandise was restored to inventory. 12 After negotiations with Jane Co. concerning problems with the merchandise purchased on August 8, received a credit memo from Jane granting a price reduction of $300. 15 Received balance due from Green Ruby for the August 5 sale. 17 Purchased office equipment from WestCo on credit, $6,400,n/45. 18 Paid the amount due Jane Co. for the August 8 purchase. 19 Sold earrings to Chic Jewellery for $2,000 under credit terms of 2/10, 1/30, FOB shipping point. The merchandise had cost $1,030. 22 Chic Jewellery requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Sent Chic Jewellery a credit memo for $250 to resolve the issue. 29 Received Chic Jewellery's payment of the amount due from the August 19 purchase. 30 Paid Luu Company the amount due from the August 1 purchase. General Journal Debit Credit Data Aug 01 Record the purchased Goods,terms3/10,n/30.FOB destination Aug 04 Record the paid freight for Luu Company. Aug 05 Record the sold goods; 3/10, 1/60, FOB destination. Aug 05 Record the cost of the August 5 sale. Aug 08 Record the purchased goods; 1/10, n/45, FOB shipping point. Aug 09 Record the shipping charges paid on August 5 sale. Aug 10 Record the sales returned by customer. Record the goods returned to inventory Aug 12 Record the receipt of credit memo for August 8 purchase. Aug 15 Record the receivable collected for Green Ruby. Aug 17 Record the purchased office equipment. Aug 18 Record the payment for Jane Co Aug 19 Record the sold goods; terms 2/10, n/30, FOB shipping point. Aug 19 Record the cost of the August 19 sale, Aug 22 Record the transaction for the issue of credit memo Aug 29 Record the receivable collected within the discount period. Aug 30Record the payment to vendor for credit transaction
