This question was posted twice this is the first one, and the second time I did this I had asked for credit for the question, Can I please have credit for this question because I was trying to find it on my own, and then realized that it had gotten posted by accident. Thank you, Deborah Scott.

All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.

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JOURNAL

ACCOUNTING EQUATION

Score: 54/276

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
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Points:

10.76 / 55

Feedback

Check My Work

General hint: Journalize Summit Company transactions from the seller's point of view and Beartooth Co. transactions from the buyer's point of view.

Aug. 1:

Seller Note that FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the sale on account and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.

Buyer - Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Under FOB shipping point, freight is paid by the buyer, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.

Aug. 2:

Seller - Freight expense increases the cost of the merchandise. However, freight is typically prepaid in cash. There is no mention in the problem of adding this cost to the buyer's invoice.

Buyer Not applicable.

Aug. 5:

Seller - Two entries are required for (1) the sale on account and (2) the cost of the merchandise sold and inventory decrease on the seller's records.

Buyer - Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Under FOB shipping point, freight is paid by the buyer, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.

Aug. 9:

Seller Not applicable.

Buyer - Payment of freight expense is added to the cost of the merchandise and is typically prepaid in cash.

General hint: FOB shipping point freight is the buyer's cost, while FOB destination freight is the seller's expense.

Aug. 15:

Seller - Two entries are required for (1) the sale on account and (2) the cost of the merchandise sold and inventory decrease on the seller's records.

Buyer - Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Added freight expense increases the cost of the merchandise.

Aug. 16:

Seller - Since the invoice was paid within the discount period, the seller debits Cash and credits Accounts Receivable for the discounted amount.

Buyer - Since the invoice is paid within the discount period, buyer debits Accounts Payable and credits Cash and for the discounted amount.

Aug. 25:

Seller - Since the invoice was paid within the discount period, the seller debits Cash and credits Accounts Receivable for the discounted amount.

Buyer - Since the invoice is paid within the discount period, buyer debits Accounts Payable and credits Cash and for the discounted amount.

Aug. 31:

Seller & Buyer - Since no discount was offered, no discounts are recorded. The cash paid on account is in each case is equal to the invoice and reduces the Accounts Receivable for the seller and the Accounts Payable for the buyer.