Following are the May merchandising transactions for the Smith Company. Use journal paper to record the entries to record each transaction. Smith uses a perpetual inventory system. The terms of all sales to customers are 3/15, n/45 unless otherwise noted. May 1 May 3 May 4 May 4 May 7 May 10 May 13 May 16 May 21 May 22 Sold merchandise on account to the Cold Corporation, retail value of $22,500, cost value of $13,750. Purchased $36,000 of merchandise from the Tara Co., terms 2/10, EOM. Gave the Cold Corp. a price reduction of $1,500 to keep merchandise that had been damaged in delivery. Purchased merchandise from the JD's Supply Centre, terms n/30, value of $6,750. Sold merchandise to Mr. Brown, retail value of $23,500, cost of $11,000. Mr. Brown paid $10,000 in cash and the balance was on account. Returned $6,000 of merchandise that was found to be faulty to the Tara Co. Paid for the merchandise purchased from the Tara Co. Cash sales for the first half of the month are retail value of $145,000, cost of $85,000. Paid Provincial Parcel $120 for having delivered the Tara Co. order. Received payment from Mr. Brown, net of any discount.

Following are the May merchandising transactions for the Smith Company. Use journal paper to record the entries to record each transaction. Smith uses a perpetual inventory system. The terms of all sales to customers are 3/15, n/45 unless otherwise noted. May 1 May 3 May 4 May 4 May 7 May 10 May 13 May 16 May 21 May 22 Sold merchandise on account to the Cold Corporation, retail value of $22,500, cost value of $13,750. Purchased $36,000 of merchandise from the Tara Co., terms 2/10, EOM. Gave the Cold Corp. a price reduction of $1,500 to keep merchandise that had been damaged in delivery. Purchased merchandise from the JD's Supply Centre, terms n/30, value of $6,750. Sold merchandise to Mr. Brown, retail value of $23,500, cost of $11,000. Mr. Brown paid $10,000 in cash and the balance was on account. Returned $6,000 of merchandise that was found to be faulty to the Tara Co. Paid for the merchandise purchased from the Tara Co. Cash sales for the first half of the month are retail value of $145,000, cost of $85,000. Paid Provincial Parcel $120 for having delivered the Tara Co. order. Received payment from Mr. Brown, net of any discount.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 7MCQ

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