question archive Prepare journal entries to record the following merchandising transactions of Wave Company, which applies the perpetual inventory system
Prepare journal entries to record the following merchandising transactions of Wave Company, which applies the perpetual inventory system
Subject:AccountingPrice: Bought3
Prepare journal entries to record the following merchandising transactions of Wave Company, which applies the perpetual inventory system.
July 3 Purchased merchandise from CAP Corp. for $15,000 under credit terms of 1/10, n/30, FOB destination, invoice dated July 3.
4 At CAP’s request, Wave paid $250 cash for freight charges on the July 3 purchase, reducing the amount owed to CAP.
7 Sold merchandise to Morris Co. for $10,500 under credit terms of 2/10, n/60, FOB destination, invoice dated July 7. The merchandise had cost $7,500.
10 Purchased merchandise from Murdock Corporation for $14,200 under credit terms of 1/10, n/45, FOB shipping point, invoice dated July 10. The invoice showed that at Wave’s request, Murdock paid the $600 shipping charges and added that amount to the bill. (Hint: Discounts are not applied to freight and shipping charges.)
11 Paid $300 cash for shipping charges related to the July 7 sale to Morris Co.
12 Morris returned merchandise from the July 7 sale that had cost Wave $1,250 and been sold for $1,750. The merchandise was restored to inventory.
14 After negotiations with Murdock Corporation concerning problems with the merchandise purchased on July 10, Wave received a credit memorandum from Murdock granting a price reduction of $2,000.
17 Received balance due from Morris Co. for the July 7 sale less the return on July 12.
20 Paid the amount due Murdock Corporation for the July 10 purchase less the price reduction granted.
21 Sold merchandise to Ulsh for $9,000 under credit terms of 1/10, n/30, FOB shipping point, invoice dated July 21. The merchandise had cost $6,250.
24 Ulsh requested a price reduction on the July 21 sale because the merchandise did not meet specifications. Wave sent Ulsh a credit memorandum for $1,500 to resolve the issue.
30 Received Ulsh’s cash payment for the amount due from the July 21 sale.
31 Paid CAP Corp. the amount due from the July 3 purchase.
