Problem 1: Prepare journal entries to record each of the following purchases transactions of a merchandising company. Show supporting calculations and assume a perpetual inventory system.
Mar. 5 Purchased 600 units of product with a list price of $10 per unit. The purchase is granted a trade discount of 20%; term of the sale are 2/10, n/60; invoice is dated March 5.
Mar. 7 Returned 25 defective units from the March 5 purchase and received full credit.
Mar. 15 Paid the amount due from the March 5 purchase, less the return on March 7.
Refer to question above and prepare journal entries to record each of the merchandising transactions assuming that the periodic inventory system is used.
Problem 2: Prepare journal entries to record each of the following sales transactions of a merchandising company. Show supporting calculations and assume a perpetual inventory system.
Apr. 1 Sold merchandise for $3,000, granting the customer terms of 2/10, EOM; invoice dated April 1. The cost of the merchandise is $1,800.
Apr. 4 The customer in the April 1 sale returned merchandise and received credit $600. The merchandise, which had cost $360, is returned to inventory.
Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.
Refer to above and prepare journal entries to record each of the merchandising transactions assuming that the periodic inventory system is used.