c. Discovered that merchandise with an invoice amount of $5,400 purchased in (a) was defective and returned items, receiving credit. Accounts Payable-Schell Co. Inventory Feedback Inventory Accounts Payable-Schell Co. Feedback ✓ Check My Work c. This transaction reduces Inventory and the Accounts Payable. Since this return was made after payment was made at the discounted price, the credit will be for the cost of returned goods less the discount. d. Purchased $4,400 of merchandise from Schell Co. on account, terms n/30. ✓ ✓ ✓ Feedback Cash Accounts Payable-Schell Co. 5,346 ✓ ✓ Check My Work d. A purchase increases Inventory and Accounts Payable. ✓ 5,346 ✓ 4,400 e. Received a refund from Schell Co. for return in (c) less the purchase in (d). 4,400 X X Check My Work e. Compare the amount owed in (d) with the amount credited to the buyer in (c). Cash refunded from the supplier will be for the difference between these two amounts.
c. Discovered that merchandise with an invoice amount of $5,400 purchased in (a) was defective and returned items, receiving credit. Accounts Payable-Schell Co. Inventory Feedback Inventory Accounts Payable-Schell Co. Feedback ✓ Check My Work c. This transaction reduces Inventory and the Accounts Payable. Since this return was made after payment was made at the discounted price, the credit will be for the cost of returned goods less the discount. d. Purchased $4,400 of merchandise from Schell Co. on account, terms n/30. ✓ ✓ ✓ Feedback Cash Accounts Payable-Schell Co. 5,346 ✓ ✓ Check My Work d. A purchase increases Inventory and Accounts Payable. ✓ 5,346 ✓ 4,400 e. Received a refund from Schell Co. for return in (c) less the purchase in (d). 4,400 X X Check My Work e. Compare the amount owed in (d) with the amount credited to the buyer in (c). Cash refunded from the supplier will be for the difference between these two amounts.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
chap 5 q3 Answer part e

Transcribed Image Text:c. Discovered that merchandise with an invoice amount of $5,400 purchased in (a) was defective and returned items, receiving credit.
Accounts Payable-Schell Co.
Inventory
Feedback
▼ Check My Work
c. This transaction reduces Inventory and the Accounts Payable. Since this return was made after payment was made at the discounted price, the credit will be for the cost of returned goods less the discount.
Inventory
d. Purchased $4,400 of merchandise from Schell Co. on account, terms n/30.
Accounts Payable-Schell Co.
Feedback
5,346
Cash
Accounts Payable-Schell Co.
5,346
4,400
Check My Work
d. A purchase increases Inventory and Accounts Payable.
Feedback
e. Received a refund from Schell Co. for return in (c) less the purchase in (d).
4,400
X
X
Check My Work
e. Compare the amount owed in (d) with the amount credited to the buyer in (c). Cash refunded from the supplier will be for the difference between these two amounts.

Transcribed Image Text:Purchase-Related Transactions
Journalize entries for the following related transactions of Lilly Heating & Air Company: (If an amount box does not require an entry, leave it blank.)
a. Purchased $27,000 of merchandise from Schell Co. on account, terms 1/10, n/30.
Inventory
Accounts Payable-Schell Co.
Feedback
▼ Check My Work
a. A purchase increases inventory and the amount that is owed on account.
Accounts Payable-Schell Co.
Cash
b. Paid the amount owed on the invoice within the discount period.
Inventory
Feedback
Accounts Payable-Schell Co.
27,000
Inventory
Feedback
Check My Work
b. A payment of the invoice within the discount period reduces Accounts Payable and Cash for the amount of the invoice less the discount.
Check My Work
27,000
27,000
c. Discovered that merchandise with an invoice amount of $5,400 purchased in (a) was defective and returned items, receiving credit.
Check My Work
26,730
5,346
270
5,346
Previous
Next
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