March 3 Bought merchandise on account from Todd Industries, invoice no. 1124, $5,560.30; terms 2/10, n/30; FOB Madison, freight prepaid and added to the invoice, $250.00 (total $5,810.30). March 12 Received credit memorandum no. 311 from Todd Industries for $625.00.
March 3 Bought merchandise on account from Todd Industries, invoice no. 1124, $5,560.30; terms 2/10, n/30; FOB Madison, freight prepaid and added to the invoice, $250.00 (total $5,810.30). March 12 Received credit memorandum no. 311 from Todd Industries for $625.00.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
- March 3 Bought merchandise on account from Todd Industries, invoice no. 1124, $5,560.30; terms 2/10, n/30; FOB Madison, freight prepaid and added to the invoice, $250.00 (total $5,810.30).
- March 12 Received credit memorandum no. 311 from Todd Industries for $625.00.
| GENERAL JOURNAL | ||||
|---|---|---|---|---|
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT |
| Mar 3 | fill in the blank 2 | |||
| fill in the blank 4 | ||||
| Purchased merchandise from Todd Industries, invoice no. 1124, terms 2/10, n/30 | ||||
| Mar 12 | fill in the blank 6 | |||
| fill in the blank 8 | ||||
| Credit memo no. 311 for return of merchandise |
Expert Solution
Step 1
Under a perpetual inventory system transactions of purchases and sales are recorded through the use of technology.
Goods Can be purchased on FOB shipping, which means shipping charges will be paid by the buyer.
alternatively, Goods can be purchased on FOB destination, this is when shipping expenses are paid by the seller.
When the goods are purchased on FOB shipping the shipping charges are added to the cost of the merchandise and when the goods are purchased on FOB destination, then the expenses of shipping are not recorded in the books of accounts as these expenses are borne by the seller of the goods.
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