Prepare journal entries to record the following merchandising transactions of Perez's, which uses the perpetual...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Prepare journal entries to record the following merchandising transactions of Perez's, which uses the perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts PayableParker.)
August 1
Purchased merchandise from Parker Company for $9,300 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.
August 5
Sold merchandise to Clark Corporation for $6,100 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,700.
August 8
Purchased merchandise from Lee Corporation for $5,760 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8.
August 9
Paid $325 cash for shipping charges related to the August 5 sale to Clark Corporation
August 10
Clark returned merchandise from the August 5 sale that had cost Perez's $100 and was sold for $200. The merchandise was restored to inventory.
August 12
After negotiations with Lee Corporation concerning problems with the purchases on August 8, Perez's received a credit memorandum from Lee granting a price reduction of $700 off the $5,760 of goods purchased.
August 14
At Parker 's request, Perez's paid $600 cash for freight charges on the August 1 purchase, reducing the amount owed to Parker.
August 15
Received balance due from Clark Corporation for the August 5 sale less the return on August 10.
August 18
Paid the amount due Lee Corporation for the August 8 purchase less the price allowance from August 12.
August 19
Sold merchandise to Clinton Company for $4,000 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,000.
August 22
Clinton requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Perez's sent Clinton a $400 credit memorandum toward the $4,000 invoice to resolve the issue.
August 29
Received Clinton's cash payment for the amount due from the August 19 sale less the price allowance from August 22.
August 30
Paid Parker Company the amount due from the August 1 purchase.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!