E5-4 - E5-4 Correct. On June 10, Meredith Company purchased...

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Unformatted text preview: E5-4 Correct. On June 10, Meredith Company purchased $8,000 of merchandise from Leinert Company FOB shipping point, terms 2/10, n/30. Meredith pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Leinert for credit on June 12. The scrap value of these goods is $150. On June 19, Meredith pays Leinert Company in full, less the purchase discount. Both companies use a perpetual inventory system. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.) Instructions (a) Prepare separate entries for each transaction on the books of Meredith Company. Date Account / Description June 10 Merchandise Inventory Accounts Payable June 11 Merchandise Inventory Cash June 12 Accounts Payable Merchandise Inventory June 19 Accounts Payable Cash Merchandise Inventory Debit $ 8000 Credit $ 8000 $ 400 $ 400 $ 300 $ 300 $ 7700 $ 7546 $ 154 (b) Prepare separate entries for each transaction for Leinert Company. The merchandise purchased by Meredith on June 10 had cost Leinert $5,000. Date Account / Description June 10 Accounts Receivable Sales (To record the sale) Cost of Goods Sold Merchandise Inventory Debit $ 8000 Credit $ 8000 $ 5000 $ 5000 (To record cost of merchandise sold) June 12 Sales Returns and Allowances Accounts Receivable (To record the return) Merchandise Inventory Cost of Goods Sold (To record cost of merchandise returned) June 19 Cash Sales Discounts Accounts Receivable $ 300 $ 300 $ 150 $ 150 $ 7546 $ 154 $ 7700 ...
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This note was uploaded on 07/31/2011 for the course ACCT 557 taught by Professor Kahn during the Spring '10 term at Strayer.

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E5-4 - E5-4 Correct. On June 10, Meredith Company purchased...

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