On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam- aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis- count. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Diaz Company. (b) Prepare separate entries for each transaction for Taylor Company. The merchandise purchased by Diaz on June 10 had cost Taylor $4,800.
E5-4 On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Dam- aged goods totaling $300 are returned to Taylor for credit on June 12. The fair value of these goods is $70. On June 19, Diaz pays Taylor Company in full, less the purchase dis- count. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Diaz Company. (b) Prepare separate entries for each transaction for Taylor Company. The merchandise purchased by Diaz on June 10 had cost Taylor $4,800. E5-5 Presented below are transactions related to R. Humphrey Company. 1. On December 3, R. Humphrey Company sold $570,000 of merchandise to Frazier Co., terms 1/10, n/30, FOB destination. R. Humphrey paid $400 for freight charges. The cost of the merchandise sold was $350,000. 2. On December 8, Frazier Co. was granted an allowance of $20,000 for merchandise pur- chased on December 3. 3. On December 13, R. Humphrey Company received the balance due from Frazier Co. Instructions (a) Prepare the journal entries to record these transactions on the books of R. Humphrey Company using a perpetual inventory system. (b) Assume that R. Humphrey Company received the balance due from Frazier Co. on January 2 of the following year instead of December 13. Prepare the
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
