Chapter 5: Purchase of Merchandise The Reading Cat has decided to expand their merchandise beyond books and has placed an order with Mac Supplies, a supplier of book related paraphernalia. Below is the invoice documenting their first order and some additional information. Company Name Mac Supplies 723 Spruce Street Los Gatos, CA 95032 Phone: (408) 555-4000 TO: The Reading Cat 555 University Ave. Los Gatos, CA 95030 Phone: (408) 888-4500 20 30 QUANTITY DESCRIPTION Vintage pins (assorted) Book-lover pencils (assorted) Make all checks payable to Mac Supplies SHIPPED VIA USPS THANK YOU FOR YOUR BUSINESS! F.O.B. POINT Destination UNIT PRICE 1.50 1.99 TOTAL INVOICE INVOICE #735 DATE: 10/15/2018 TERMS 2/10, 1/30 TOTAL $30.00 59.70 $89.70 Additional Information: 10/16: Shipping costs for this order totaled $8. 10/17: Half of the vintage pins were discovered to be in a different language and were returned by Reading Cat. Mac Supplies covered the shipping costs for the returns since it was their error. 10/25: Balance was paid to Mac Supplies. Required: 1.) Prepare the necessary journal entries for The Reading Cat. 2.) Assume instead that The Reading Cat paid the balance on October 30 (not on October 25th). Illustrate the journal entry needed on October 30th.
Chapter 5: Purchase of Merchandise The Reading Cat has decided to expand their merchandise beyond books and has placed an order with Mac Supplies, a supplier of book related paraphernalia. Below is the invoice documenting their first order and some additional information. Company Name Mac Supplies 723 Spruce Street Los Gatos, CA 95032 Phone: (408) 555-4000 TO: The Reading Cat 555 University Ave. Los Gatos, CA 95030 Phone: (408) 888-4500 20 30 QUANTITY DESCRIPTION Vintage pins (assorted) Book-lover pencils (assorted) Make all checks payable to Mac Supplies SHIPPED VIA USPS THANK YOU FOR YOUR BUSINESS! F.O.B. POINT Destination UNIT PRICE 1.50 1.99 TOTAL INVOICE INVOICE #735 DATE: 10/15/2018 TERMS 2/10, 1/30 TOTAL $30.00 59.70 $89.70 Additional Information: 10/16: Shipping costs for this order totaled $8. 10/17: Half of the vintage pins were discovered to be in a different language and were returned by Reading Cat. Mac Supplies covered the shipping costs for the returns since it was their error. 10/25: Balance was paid to Mac Supplies. Required: 1.) Prepare the necessary journal entries for The Reading Cat. 2.) Assume instead that The Reading Cat paid the balance on October 30 (not on October 25th). Illustrate the journal entry needed on October 30th.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Chapter 5: Purchase of Merchandise
The Reading Cat has decided to expand their merchandise beyond books and has placed an order with
Mac Supplies, a supplier of book related paraphernalia. Below is the invoice documenting their first
order and some additional information.
Company Name
Mac Supplies
723 Spruce Street
Los Gatos, CA 95032
Phone: (408) 555-4000
TO:
The Reading Cat
555 University Ave.
Los ve
Los Gatos, CA 95030
Phone: (408) 888-4500
20
30
QUANTITY
DESCRIPTION
Vintage pins (assorted)
Book-lover pencils (assorted)
Make all checks payable to Mac Supplies
SHIPPED VIA
USPS
THANK YOU FOR YOUR BUSINESS!
F.O.B. POINT
Destination
UNIT PRICE
1.50
1.99
TOTAL
INVOICE
INVOICE #735
DATE: 10/15/2018
TERMS
2/10, 1/30
TOTAL
$30.00
59.70
$89.70
Additional Information:
10/16: Shipping costs for this order totaled $8.
10/17: Half of the vintage pins were discovered to be in a different language and were returned by
Reading Cat. Mac Supplies covered the shipping costs for the returns since it was their error.
10/25: Balance was paid to Mac Supplies.
Required:
1.) Prepare the necessary journal entries for The Reading Cat.
2.) Assume instead that The Reading Cat paid the balance on October 30 (not on October 25th).
Illustrate the journal entry needed on October 30th.
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