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Shamrock Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) (b) (c) On July 1, (1) Shamrock purchased $75,000 of inventory, terms 2/10, n/30, FOB shipping point. (2) Shamrock paid freight costs of $1,237. On July 3, Shamrock returned damaged goods and received credit of $7,500. On July 10, Shamrock paid for the goods. Prepare all necessary journal entries for Shamrock. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)

Shamrock Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) (b) (c) On July 1, (1) Shamrock purchased $75,000 of inventory, terms 2/10, n/30, FOB shipping point. (2) Shamrock paid freight costs of $1,237. On July 3, Shamrock returned damaged goods and received credit of $7,500. On July 10, Shamrock paid for the goods. Prepare all necessary journal entries for Shamrock. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)

FINANCIAL ACCOUNTING
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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Intermediate Accounting 105

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**Shamrock Corporation Accounting Transactions** Shamrock Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. The following transactions occurred in July: **Transactions:** - **(a) July 1:** 1. Shamrock purchased $75,000 of inventory, terms 2/10, n/30, FOB shipping point. 2. Shamrock paid freight costs of $1,237. - **(b) July 3:** - Shamrock returned damaged goods and received a credit of $7,500. - **(c) July 10:** - Shamrock paid for the goods. **Journal Entries:** **1. July 1:** - **Inventory:** Debit $75,000 - **Accounts Payable:** Credit $75,000 - **Freight-In:** Debit $1,237 - **Cash:** Credit $1,237 **2. July 3:** - **Accounts Payable:** Debit $7,500 - **Inventory:** Credit $7,500 **3. July 10:** - **Accounts Payable:** Debit $73,500 - **Purchase Discounts:** Credit $1,500 - **Cash:** Credit $72,000 **Important Note:** - If no entry is required, "No Entry" should be selected for account titles and $0 should be entered for amounts. - Credit account titles are automatically indented when the amount is entered. Do not indent manually. - All debit entries should be listed before credit entries.
Transcribed Image Text:**Shamrock Corporation Accounting Transactions** Shamrock Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. The following transactions occurred in July: **Transactions:** - **(a) July 1:** 1. Shamrock purchased $75,000 of inventory, terms 2/10, n/30, FOB shipping point. 2. Shamrock paid freight costs of $1,237. - **(b) July 3:** - Shamrock returned damaged goods and received a credit of $7,500. - **(c) July 10:** - Shamrock paid for the goods. **Journal Entries:** **1. July 1:** - **Inventory:** Debit $75,000 - **Accounts Payable:** Credit $75,000 - **Freight-In:** Debit $1,237 - **Cash:** Credit $1,237 **2. July 3:** - **Accounts Payable:** Debit $7,500 - **Inventory:** Credit $7,500 **3. July 10:** - **Accounts Payable:** Debit $73,500 - **Purchase Discounts:** Credit $1,500 - **Cash:** Credit $72,000 **Important Note:** - If no entry is required, "No Entry" should be selected for account titles and $0 should be entered for amounts. - Credit account titles are automatically indented when the amount is entered. Do not indent manually. - All debit entries should be listed before credit entries.
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