The following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 3 Pippen
Question:
The following merchandise transactions occurred in December. Both companies use a perpetual inventory system.
Dec. 3 Pippen Company sold merchandise to Thomas Co. for $32,000, terms 2/10, n/30, FOB destination. This merchandise cost Pippen Company $18,000.
4 The correct company paid freight charges of $650.
8 Thomas Co. returned unwanted merchandise to Pippen. The returned merchandise had a sales price of $1,800 and a cost of $990. It was restored to inventory.
13 Pippen Company received the balance due from Thomas Co.
Instructions
(a) Prepare the journal entries to record these transactions on the books of Pippen Company.
(b) Prepare the journal entries to record these transactions on the books of Thomas Co.
(c) Calculate the gross profit earned by Pippen on the above transactions.
Step by Step Answer:
a Dec 3 Accounts Receivable 32000 Sales 32000 Cost of Goods Sold 18000 Merchandise Inventory 18000 4 ...View the full answer
Accounting Principles Part 1
ISBN: 978-1118306789
6th Canadian edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
