ACC 281 55-16 - 900...

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This information relates to Martinez Co. 1. On April 5 purchased merchandise from D. Norlan Company for $20,000, terms 2/10, net/30, FOB shipping point. 2. On April 6 paid freight costs of $900 on merchandise purchased from D. Norlan Company. 3. On April 7 purchased equipment on account for $26,000. 4. On April 8 returned some of April 5 merchandise to D. Norlan Company which cost $2,800. 5. On April 15 paid the amount due to D. Norlan Company in full. Instructions (a) Prepare the journal entries to record these transactions on the books of Martinez Co. using a periodic inventory system. (b) Assume that Martinez Co. paid the balance due to D. Norlan Company on May 4 instead of April 15. Prepare the journal entry to record this payment. A. Apr. 5 Purchases………………………………………………………………… 20,000 Accounts Payable…………………………………… (to record goods purchased on account from D. Norlan Co.) 6 Freight-in………………………………………………………………….
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Unformatted text preview: 900 Cash………………………………………………………… 7 Equipment………………………………………………………………. 26,000 Accounts Payable…………………………………… (to record equipment purchased on account) 8 Accounts Payable……………………………………………………. . 2,800 Purchase Returns and Allowances…………. (to record return of goods purchased from D. Norlan Co) 15 Accounts Payable (20,000-2,800)……………………………. . 17,200 Purchase Discount (17,200 x .02)……………. Cash………………………………………………………… ( to record payment within the discounted period) B. May. 4 Accounts payable (20,000-2,800)……………………………. . 17,200 Cash ………………………………………………………. . ( to record payment on term 2/10, n/30) 20,000 900 26,000 2,800 344 16,856 17,200...
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