On June 10
Subject:BusinessPrice: Bought3
On June 10. Spinner Company purchased $10,000 of merchandise from Lawrence Company, FOB shipping point, terms 2/10, n/30. Spinner pays the freight costs of $600 on June 11. Damaged goods totaling $700 are returned to Lawrence for credit on June 12. The fair value of these goods is $300. On June 19, Spinner pays Lawrence in full, less the purchase discount. Both companies use a perpetual inventory system Instructions (a) Prepare separate entries for each transaction on the books of Spinner Company using periodic inventory system. 6) Prepare separate entries for each transaction for Lawrence Company using periodic inventory system. The merchandise purchased by Spinner on June 10 had cost Lawrence $6,400.
