Newman Hardware Store completed the following transactions in December 2019. It uses perpetual inventory system. It records both purchase and sales at gross amount. Purchased goods from Jerry Wholesale for $4,200 with the terms of 2/15, 1 Dec n/30. Sold goods on account to Mack Ltd at $2,100, terms 1/20, n/30. The cost of goods sold was $1,300. Returned the defective goods costing $300 purchased on 1 December to Jerry Wholesale. Paid the outstanding amount owed to Jerry Wholesale in full. Mack Ltd returned the unsatisfactory goods from the 2 December sales. The selling price was $400 and the cost of the goods was $180. Paid $200 for transportation fee, of which half is for 2 December sale and the remaining for 1 December purchase. Received collections in full, from the customers billed on 2 December. 14 15 16 21 Purchased goods from Jerry Wholesale for $8,400 with the terms of 2/15, n/30, FOB Destination Point, with goods shipped on the same day and received on 3 January 2020. Found inventory shortfall of $200 in the month-end physical count. 30 31 Required a) Prepare the journal entries to record the above transactions. Will your journal entries on 30 December be different if the purchase made on 31 December b) had FOB Shipping point terms? Explain. If yes, show the entries.
Newman Hardware Store completed the following transactions in December 2019. It uses perpetual inventory system. It records both purchase and sales at gross amount. Purchased goods from Jerry Wholesale for $4,200 with the terms of 2/15, 1 Dec n/30. Sold goods on account to Mack Ltd at $2,100, terms 1/20, n/30. The cost of goods sold was $1,300. Returned the defective goods costing $300 purchased on 1 December to Jerry Wholesale. Paid the outstanding amount owed to Jerry Wholesale in full. Mack Ltd returned the unsatisfactory goods from the 2 December sales. The selling price was $400 and the cost of the goods was $180. Paid $200 for transportation fee, of which half is for 2 December sale and the remaining for 1 December purchase. Received collections in full, from the customers billed on 2 December. 14 15 16 21 Purchased goods from Jerry Wholesale for $8,400 with the terms of 2/15, n/30, FOB Destination Point, with goods shipped on the same day and received on 3 January 2020. Found inventory shortfall of $200 in the month-end physical count. 30 31 Required a) Prepare the journal entries to record the above transactions. Will your journal entries on 30 December be different if the purchase made on 31 December b) had FOB Shipping point terms? Explain. If yes, show the entries.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Newman Hardware Store completed the following transactions in December 2019. It uses
perpetual inventory system. It records both purchase and sales at gross amount.
Purchased goods from Jerry Wholesale for $4,200 with the terms of 2/15,
1 Dec
n/30.
Sold goods on account to Mack Ltd at $2,100, terms 1/20, n/30. The cost
of goods sold was $1,300.
Returned the defective goods costing $300 purchased on 1 December to
Jerry Wholesale.
Paid the outstanding amount owed to Jerry Wholesale in full.
Mack Ltd returned the unsatisfactory goods from the 2 December sales.
The selling price was $400 and the cost of the goods was $180.
Paid $200 for transportation fee, of which half is for 2 December sale and
the remaining for 1 December purchase.
Received collections in full, from the customers billed on 2 December.
14
15
16
21
Purchased goods from Jerry Wholesale for $8,400 with the terms of 2/15,
n/30, FOB Destination Point, with goods shipped on the same day and
received on 3 January 2020.
Found inventory shortfall of $200 in the month-end physical count.
30
31
Required
a) Prepare the journal entries to record the above transactions.
Will your journal entries on 30 December be different if the purchase made on 31 December
b)
had FOB Shipping point terms? Explain. If yes, show the entries.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education