Question
Use the following information for Cornerstone Exercises 6-20 and 6-21: Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during
Use the following information for Cornerstone Exercises 6-20 and 6-21: Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April: a. On April 1, Mathis purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,500, and the cost of the mer- chandise sold was $2,450. b. On April 1, Mathis paid freight charges of $100 cash to have the goods delivered to its warehouse. c. On April 8, Mathis returned $1000 of the merchandise. The cost of the merchandise returned was $700. d. On April 10, Mathis paid Reece the balance due. Cornerstone Exercise 6-20 Recording Purchase Transactions Refer to the information for Mathis and Reece Companies above. Required: 1. Prepare the journal entry to record the April 1 purchase of merchandise and payment of freight by Mathis. 2. Prepare the journal entry to record the April 8 return of merchandise. 3. Prepare the journal entry to record the April 10 payment to Reece.
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