Prepare journal entries to record the following merchandising transactions of Gonzalez's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—King.) July 1 Purchased merchandise from King Company for $6,800 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. July 2 Sold merchandise to Wright Company for $1,300 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $780. July 3 Paid $285 cash for freight charges on the purchase of July 1. July 8 Sold merchandise that had cost $1,500 for $2,500 cash. July 9 Purchased merchandise from Lee Company for $2,600 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11 Returned $500 of merchandise purchased on July 9 from Lee Company and debited its account payable for that amount. July 12 Received the balance due from Wright Company for the invoice dated July 2, net of the discount. July 16 Paid the balance due to King Company within the discount period. July 19 Sold merchandise that cost $1,400 to Griffin Company for $2,000 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 21 Gave a price reduction (allowance) of $400 to Griffin Company for merchandise sold on July 19 and credited Griffin’s accounts receivable for that amount. July 24 Paid Lee Company the balance due, net of discount. July 30 Received the balance due from Griffin Company for the invoice dated July 19, net of discount. July 31 Sold merchandise that cost $4,700 to Wright Company for $7,800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Prepare journal entries to record the following merchandising transactions of Gonzalez's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—King.)

July 1	Purchased merchandise from King Company for $6,800 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
July 2	Sold merchandise to Wright Company for $1,300 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $780.
July 3	Paid $285 cash for freight charges on the purchase of July 1.
July 8	Sold merchandise that had cost $1,500 for $2,500 cash.
July 9	Purchased merchandise from Lee Company for $2,600 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
July 11	Returned $500 of merchandise purchased on July 9 from Lee Company and debited its account payable for that amount.
July 12	Received the balance due from Wright Company for the invoice dated July 2, net of the discount.
July 16	Paid the balance due to King Company within the discount period.
July 19	Sold merchandise that cost $1,400 to Griffin Company for $2,000 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
July 21	Gave a price reduction (allowance) of $400 to Griffin Company for merchandise sold on July 19 and credited Griffin’s accounts receivable for that amount.
July 24	Paid Lee Company the balance due, net of discount.
July 30	Received the balance due from Griffin Company for the invoice dated July 19, net of discount.
July 31	Sold merchandise that cost $4,700 to Wright Company for $7,800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

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