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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Intermediate Accounting 105
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
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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