EX.06.204.ALGO Sampson Co. sold merchandise to Batson Co. on account, $28,500, terms 2/15, net 45. The cost of the merchandise sold is $21,375. Batson Co. paid the invoice within the discount period. Assume both Sampson and Batson use a perpetual inventory system. Journalize these transactions for Sampson Co. If an amount box does not require an entry, leave it blank. a. fill in the blank 9d2beefcd029043_2 fill in the blank 9d2beefcd029043_3 fill in the blank 9d2beefcd029043_5 fill in the blank 9d2beefcd029043_6 b. fill in the blank 9d2beefcd029043_8 fill in the blank 9d2beefcd029043_9 fill in the blank 9d2beefcd029043_11 fill in the blank 9d2beefcd029043_12 c. fill in the blank 9d2beefcd029043_14 fill in the blank 9d2beefcd029043_15 fill in the blank 9d2beefcd029043_17 fill in the blank 9d2beefcd029043_18 Journalize these transactions for Batson Co. If an amount box does not require an entry, leave it blank. a. and b. fill in the blank a156b7facffbfd2_2 fill in the blank a156b7facffbfd2_3 fill in the blank a156b7facffbfd2_5 fill in the blank a156b7facffbfd2_6 c. fill in the blank a156b7facffbfd2_8 fill in the blank a156b7facffbfd2_9 fill in the blank a156b7facffbfd2_11 fill in the blank a156b7facffbfd2_12
- Sampson Co. sold merchandise to Batson Co. on account, $28,500, terms 2/15, net 45.
- The cost of the merchandise sold is $21,375.
- Batson Co. paid the invoice within the discount period.
Assume both Sampson and Batson use a perpetual inventory system.
Journalize these transactions for Sampson Co. If an amount box does not require an entry, leave it blank.
| a. | fill in the blank 9d2beefcd029043_2 | fill in the blank 9d2beefcd029043_3 | |
| fill in the blank 9d2beefcd029043_5 | fill in the blank 9d2beefcd029043_6 | ||
| b. | fill in the blank 9d2beefcd029043_8 | fill in the blank 9d2beefcd029043_9 | |
| fill in the blank 9d2beefcd029043_11 | fill in the blank 9d2beefcd029043_12 | ||
| c. | fill in the blank 9d2beefcd029043_14 | fill in the blank 9d2beefcd029043_15 | |
| fill in the blank 9d2beefcd029043_17 | fill in the blank 9d2beefcd029043_18 |
Journalize these transactions for Batson Co. If an amount box does not require an entry, leave it blank.
| a. and b. | fill in the blank a156b7facffbfd2_2 | fill in the blank a156b7facffbfd2_3 | |
| fill in the blank a156b7facffbfd2_5 | fill in the blank a156b7facffbfd2_6 | ||
| c. | fill in the blank a156b7facffbfd2_8 | fill in the blank a156b7facffbfd2_9 | |
| fill in the blank a156b7facffbfd2_11 | fill in the blank a156b7facffbfd2_12 |
Inventory:
It is the goods and material a business hold to sell. There are two methods for recording inventory in the books of account, they are, periodic method and the perpetual method.
Perpetual Inventory System:
Perpetual Inventory is the system where the inventory is being changed perpetually. When there is a production, the inventory account is affected directly instead of the Purchase account. Here, there is no need to calculate the cost of goods sold account at the end of the accounting period, as with each sale, the Cost of Goods Sold Account is updated.
Here, under this method, when any sale is made, there are two entries recorded, one for the sales revenue earned and the second to account for the cost value of the inventory sold. When any purchase is made, it is accounted directly to the Inventory Account.
Trade Terms or Discount Terms:
Trade Terms or Discount Terms refer to the terms of discount offered by vendors to the buyers for early payment of the cash. Many companies offer a discount on early cash payment and it is referred like this, 2/10, n/30, which means, if the invoice is paid within 10 days it attracts a 2% discount, otherwise full payment is due in 30 days.
Although numbers are always interchangeable across sellers, the standard structure for offering a discount is the same.
1. The first number is always the percentage discount
2. The second number is always the days of the discount period.
3. If the invoice is not paid within the discount period, no price reduction occurs and the invoice must be paid within the stipulated number of days before.
Now, let us record the transactions in both the books of the two companies mentioned one by one.
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