A company uses the perpetual inventory system and the gross method of accounting for purchases and sales. It had the following transactions during August. August 1 Sold merchandise on credit for $5,300, terms 3/10, n/30. The items sold had a cost of $3,800. August 3 Purchased merchandise for cash, $2,750. August 4 Purchased merchandise on credit for $3,200, terms 1/20, n/30. August 5 Customer returns $3,060 of merchandise purchased July 20. The returned items had a cost of $2,040. The returned items are restored to inventory and the customer's Accounts Receivable is credited. August 10 Received payment for merchandise sold August 1. August 15 After negotiations, received a $600 allowance (for scuffed merchandise) toward the amount owed on the August 4 purchase. August 18 Paid freight charges of $230 for merchandise ordered last month. (FOB shipping point) August 23 Paid for the merchandise purchased August 4 less the allowance. August 24 Sold merchandise on credit for $7,300, terms 2/10, n/30. The items had a cost of $4,900. August 31 Received payment for merchandise sold on August 24. Prepare journal entries to record these transactions.

A company uses the perpetual inventory system and the gross method of accounting for purchases and sales. It had the following transactions during August. August 1 Sold merchandise on credit for $5,300, terms 3/10, n/30. The items sold had a cost of $3,800. August 3 Purchased merchandise for cash, $2,750. August 4 Purchased merchandise on credit for $3,200, terms 1/20, n/30. August 5 Customer returns $3,060 of merchandise purchased July 20. The returned items had a cost of $2,040. The returned items are restored to inventory and the customer's Accounts Receivable is credited. August 10 Received payment for merchandise sold August 1. August 15 After negotiations, received a $600 allowance (for scuffed merchandise) toward the amount owed on the August 4 purchase. August 18 Paid freight charges of $230 for merchandise ordered last month. (FOB shipping point) August 23 Paid for the merchandise purchased August 4 less the allowance. August 24 Sold merchandise on credit for $7,300, terms 2/10, n/30. The items had a cost of $4,900. August 31 Received payment for merchandise sold on August 24. Prepare journal entries to record these transactions.

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Description: A company uses the perpetual inventory system and the gross method of accounting for purchases and sales. It had the followingtransactions during August.August 1 Sold merchandise on credit for $5,300, terms 3/10, n/30. The items sold had a cost of $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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