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Homework answers / question archive / University of North Texas - ACCOUNTING 2301 Chapter 4 Homework Connect Accounting 1)Prepare journal entries to record the following transactions for a retail store
University of North Texas - ACCOUNTING 2301
Chapter 4 Homework Connect Accounting
1)Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.
Apr. 2 Purchased $4,600 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
21 After negotiations, received from Frist a $500 allowance toward the $8,500 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.
May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000).
5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost $15,000 to Allied.
15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.
Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
|
Debit |
Credit |
Merchandise inventory |
$ 30,000 |
|
Prepaid selling expenses |
5,600 |
|
Dividends |
33,000 |
|
Sales |
|
$ 529,000 |
Sales returns and allowances |
17,000 |
|
Sales discounts 5,000 |
|
0
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