Apr. 2 Purchased merchandise from Blue Company under the following terms: $6,200 price, invoice
dated April 2, credit terms of 2/15, n/60, and FOB shipping point.
3 Paid $347 for shipping charges on the April 2 purchase.
4 Returned to Blue Company unacceptable merchandise that had an invoice price of $650.
17 Sent a check to Blue Company for the April 2 purchase, net of the discount and the returned
merchandise.
18 Purchased merchandise from Fox Corp. under the following terms: $12,850 price, invoice
dated April 18, credit terms of 2/10, n/30, and FOB destination.
21 After negotiations, received from Fox a $3,598 allowance on the April 18 purchase.
28 Sent check to Fox paying for the April 18 purchase, net of the discount and allowance.
Prepare journal entries to record the above transactions for a retail store. Assume a perpetual inventory
system. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)
Explanation:
Apr 17: Paid balance (less 2%) within discount period.
Apr 28: Paid balance (less 2%) within discount period.
July 1 Purchased merchandise from Blue Company for $10,000 under credit terms of 2/15, n/30, FOB
shipping point, invoice dated July 1.
2 Sold merchandise to HP Co. for $1000 under credit terms of 1/10, n/60, FOB shipping point, invoice
dated July 2. The merchandise had cost $650.
3 Paid $200 cash for freight charges on the purchase of July 1.
8 Sold merchandise that had cost $2,300 for $3,000 cash.
9 Purchased merchandise from Sally Co. for $1,550 under credit terms of 1/15, n/60, FOB destination,
invoice dated July 9.
11 Received a $550 credit memorandum from Sally Co. for the return of part of the merchandise
purchased on July 9.
12 Received the balance due from HP Co. for the invoice dated July 2, net of the discount.
16 Paid the balance due to Blue Company within the discount period.
19 Sold merchandise that cost $1100 to ABC Co. for $1,650 under credit terms of 1/15, n/60, FOB
shipping point, invoice dated July 19.
21 Issued a $300 credit memorandum to ABC Co. for an allowance on goods sold on July 19.
24 Paid Sally Co. the balance due after deducting the discount.
30 Received the balance due from ABC Co. for the invoice dated July 19, net of discount.
31 Sold merchandise that cost $6,000 to HP Co. for $7,100 under credit terms of 1/10, n/60, FOB
shipping point, invoice dated July 31.
Prepare journal entries to record the above merchandising transactions of Ruby Company, which applies
the perpetual inventory system. (Identify each receivable and payable; for example, record the purchase
on July 1 in Accounts Payable—Blue.) (Round your answers to nearest dollar amount. Omit the "$"
sign in your response.)
July 1
Merchandise inventory 10000
Accounts payable- Blue
10000
……………………………………………………………………………
July 2 Accounts receivable- HP 1000
Sales
1000
Cost of goods sold 650
Merchandise inventory
650
…………………………………………………………………………….
July 3 Merchandise inventory 200
Cash
200
……………………………………………………………………………….
July 8 cash
3000
Sales
3000
Cost of goods sold 2300
Merchandise inventory
2300
………………………………………………………………………….
July 9 Merchandise inventory 1550
Accounts payable- Sally
1550
……………………………………………………………………………
July 11 Accounts payable- Sally
550
Merchandise inventory
550
………………………………………………………………………….
July 12 Cash
990
Sales discounts 10
Accounts receivable- HP 1000
……………………………………………………………………
July 16 Accounts payable- Blue
10000
Merchandise inventory
200
Cash
9800
………………………………………………………………………….
July 19 Accounts receivable- ABC
1650
Sales
1650
Cost of goods sold 1100
Merchandise inventory
1100
…………………………………………………………………………
July 21 Sales returns and allowances 300
Accounts receivable- ABC
300
………………………………………………………………………….
July 24 Accounts payable- Sally
1000
Merchandise inventory
10
Cash
990
…………………………………………………………………………..
July 30 Cash
1337
Sales discounts 13
Accounts receivable- ABC 1350
……………………………………………………………………………
July 31 Accounts receivable- HP 7100
Sales
7100
Cost of goods sold 6000
Merchandise inventory
6000
Explanation:
July12 Sales Discounts (1%) = $10
16 Merchandise Inventory (1%) = $200
24 Merchandise Inventory (1% × $1,000) = $10
30 Sales discounts [($1,650 – $300) × 0.01] = $13.5
A company reports the following sales related information: Sales (gross) of $200,000; Sales discounts of
$3,800; Sales returns and allowances of $10,000; Sales salaries expense of $8,000.
Prepare the net sales portion of the company’s income statement. (Input all amounts as positive
values. Omit the "$" sign in your response.)
Income Statement
Sales
Less: Sales discounts
Less: Sales returns and allow ances
Net sales
$
$
200,000
3,800
10,000
13,800
186,200