DO IT! 5-2 On October 5, Wang Company buys merchandise on account from Davis Company. The selling price of the goods is $4,800, and the cost to Davis Company is $3,100. On October 8, Wang returns defective goods with a selling price of $650 and a fair value of $100. Record the transactions on the books of Wang Company. DO ITI 5-3 Assume information similar to that in DO ITI 5-2: On October 5, Wang Com- pany buys merchandise on account from Davis Company. The selling price of the goods is $4,800, and the cost to Davis Company is $3,100. On October 8, Wang returns defective goods with a selling price of $650 and a fair value of $100. Record the transactions on the books of Davis Company. DO IT! 5-4 The trial balance of Beads and Bangles at December 31 shows Inventory $21,000, Sales Revenue $156,000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $92,400, Interest Revenue $5,000, Freight-Out $1,800, Utilities Expense $7,700, and Salaries and Wages Expense $19,500. Prepare the closing entries for Beads and Bangles for these accounts. E5-2 Information related to Kerber Co. is presented below. 1. On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes. 3. On April 7, purchased equipment on account for $26,000. 4. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,00 5. On April 15, paid the amount due to Wilkes Company in full. for retur ise. Instructions (a) Prepare the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system. (b) Assume that Kerber Co. paid the balance due to Wilkes Company on May 4 instead of April 15. Prepare the journal entry to record this payment.
