Prepare journal entries to record the following merchandising transactions of Royal Company, which applies the...
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Accounting
Prepare journal entries to record the following merchandising transactions of Royal Company, which applies the perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts PayableChiefs).
July1 Purchased merchandise from Chief Company for $4,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
2 Sold merchandise to Sporting Co. for $1,900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $500.
3 Paid $125 cash for freight charges on the purchase of July 1.
8 Sold merchandise that had cost $1,300 for $1,700 cash.
12 Received the balance due from Sporting Co. for the invoice dated July 2, net of the discount.
16 Paid the balance due to Chief Company within the discount period.
19 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
21 Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on July 19.
30 Received the balance due from Art Co. for the invoice dated July 19, net of discount.
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