114Unit 7jingscript 6-5

114Unit 7jingscript 6-5 - FOB, shipping point. 2/10, n/30....

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Unit 7 Problem 6-5B Good day everyone, this problem addresses sales related and purchase related transactions. This topic is covered in objective three of chapter 6. In this problem you are required to prepare journal entries. Based on the information provided for Calworks Company during April we must prepare journal entries. On April 3 rd the firm purchased merchandise on account from Prescott Co., list price $42,000, trade discount 40%, terms FOB destination, 2/10, n/30. We would debit merchandise inventory for $25,200 and credit accounts payable for $25,200. Notice we take the $42,000 and subtract 40%. On April 4 th they sold merchandise for $18,200 cash. The cost of the merchandise sold was $11,000. We would debit cost of merchandise sold for $11,000 and credit merchandise inventory for $11,000. On April 5 th they purchased merchandise on account from Stafford Co., $21,300, terms
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Unformatted text preview: FOB, shipping point. 2/10, n/30. With prepaid freight of $600 added to the invoice. We would debit merchandise Inventory for $21,900 and credit accounts Payable Stafford Co. for $21,900. On April 6 th , the firm returned $6,000 of merchandise purchased on April 3 rd from Prescott Co. We would debit accounts payable for $6,000 and credit merchandise inventory for $6,000. On April 11 th the firm sold merchandise on account to Logan Co., list price of $8,500, trade discount 20%, term 1/10/ n/30. The cost of the merchandise sold was $4,500. We would debit the cost of merchandise sold for $4,500 and credit merchandise inventory for the same amount. We would also debit accounts payable for $,6800 and credit sales for $6,800. The remaining entries follow the same pattern. This is the end of Problem 6-5B....
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This note was uploaded on 10/20/2011 for the course BUISNESS ab202 taught by Professor Millazzo during the Spring '11 term at Kaplan University.

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