E5-4 On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam- aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis- count. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Diaz Company. (b) Prepare separate entries for each transaction for Taylor Company. The merchandise purchased by Diaz on June 10 had cost Taylor $4,800.
E5-4 On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam- aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis- count. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Diaz Company. (b) Prepare separate entries for each transaction for Taylor Company. The merchandise purchased by Diaz on June 10 had cost Taylor $4,800.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![E5-4 On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company,
FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam-
aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of
these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis-
count. Both companies use a perpetual inventory system.
Instructions
(a) Prepare separate entries for each transaction on the books of Diaz Company.
(b) Prepare separate entries for each transaction for Taylor Company. The merchandise
purchased by Diaz on June 10 had cost Taylor $4,800.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0841ca5c-729f-4b9d-86a7-b96ec9c0d723%2F4d2dd04c-3e1d-46e9-a1f8-0f5fd4d268ee%2Fk0dk1t3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E5-4 On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company,
FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam-
aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of
these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis-
count. Both companies use a perpetual inventory system.
Instructions
(a) Prepare separate entries for each transaction on the books of Diaz Company.
(b) Prepare separate entries for each transaction for Taylor Company. The merchandise
purchased by Diaz on June 10 had cost Taylor $4,800.
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