Mathis Company and Reece Company use the periodic system. The following transactions occurred during the month of April: On April 1, Mathis purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225. On April 1, Mathis paid freight charges of $250 cash to have the goods delivered to its warehouse. On April 8, Mathis returned $800 of the merchandise which had originally cost Reece $500. On April 10, Mathis paid Reece the balance due. Required: Hide 1. Prepare the journal entry to record the April 1 purchase of merchandise and payment of freight by Mathis. April 1 (Purchased inventory on account) April 1 (Paid cash for shipping fees) Hide 2. Prepare the journal entry to record the April 8 return of merchandise. April 8 (Returned merchandise) Hide 3. Prepare the journal entry to record the April 10 payment to Reece. If an amount box does not require an entry, leave it blank. April 10 (Recorded payment within the discount period)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mathis Company and Reece Company use the periodic system. The following transactions occurred during the month of April:

On April 1, Mathis purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225.
On April 1, Mathis paid freight charges of $250 cash to have the goods delivered to its warehouse.
On April 8, Mathis returned $800 of the merchandise which had originally cost Reece $500.
On April 10, Mathis paid Reece the balance due.

Required:

Hide

1. Prepare the journal entry to record the April 1 purchase of merchandise and payment of freight by Mathis.

April 1

(Purchased inventory on account)

April 1

(Paid cash for shipping fees)

Hide

2. Prepare the journal entry to record the April 8 return of merchandise.

April 8

(Returned merchandise)

Hide

3. Prepare the journal entry to record the April 10 payment to Reece. If an amount box does not require an entry, leave it blank.

April 10

(Recorded payment within the discount period)

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