Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wildhorse Stores is a new company that started operations on March 1, 2021. The company has decided to use a perpetual inventory system. The following

image text in transcribed
image text in transcribed
image text in transcribed
Wildhorse Stores is a new company that started operations on March 1, 2021. The company has decided to use a perpetual inventory system. The following purchase transactions occurred in March: Mar. Wildhorse Stores purchases $9.000 of merchandise for resale from Octagon Wholesalers, terms 2/10, 1/30, FOB shipping point 1 2 3 The correct company pays $170 for the shipping charges Wildhorse retums 51,000 of the merchandise purchased on March 1 because it was the wrong colour. Octagon gives Wildhorse a $1,000 credit on its account. Wildhore Store purchases an additional $13,500 of merchandise for resale from Octagon Wholesalers, terms 2/10, 1:30, FOB destination. 21 22 The correct company pays $190 for freight charges Wildhorse returns S450 of the merchandise purchased on March 21 because it was damaged. Octagon gives Wildhorse a $450 credit on its account. 23 30 Wildhorse paid Octagon the amount owing for the merchandise purchased on March I. Wildhorse paid Octagon the amount owing for the merchandise purchased on March 21. 31 Prepare Wildhorse Stores journal entries to record the above transactions. (Credit accountiles are automatically indented when the amount is entered. Do morindent manually. If ne entry is required, select "No Entry for the account titles and enter for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (Purchase on account (To record cash payment of freight.) (To record purchase return) (Purchase on account.) (To record purchase return.) (Payment on account.) (Payment on account.) Post the transactions to the Merchandise Inventory account. Compare the total in this account with the total of the cash paid during March by Wildhorse for the purchase of inventory. (Note: Assume there were no sales of inventory in March.) (Post entries in the order of journal entries presented in the previous part) Merchandise Inventory Total cash payments for inventory in March $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Foundations and Evolutions

Authors: Michael R. Kinney, Cecily A. Raiborn

9th edition

9781285401072, 1111971722, 1285401077, 978-1111971724

More Books

Students also viewed these Accounting questions