The following is a series of related transactions between Company A, a wholesaler, and Company B, a chain of retail shoe stores: April 9. Company A sold to Company B 300 units of product X on account, terms 3/15, n/60. The cost of product to company A was $90 per unit and the sales price was $130 per unit. April 12. Kazpost Express charged $900 for delivering this merchandise to Company B. This charge was fully paid by Company B. April 20. Company B returned 60 units of product to Company A because they were defective. Company A allowed to Company B full credit for this return. April 22. Company B paid the remaining balance due to Company A within the discount period. Instructions Record this series of transactions in the general journal of Company A (The company records sales at sales gross price.) Record this series of transactions in the general journal of Company B (The company records purchases of merchandise at net cost and uses a Transportation expense account to record charges from Kazpost.) Assume Company B failed to make a payment on April 22 and did it on April 30 instead. Make a journal entries for April 30 for both Company A and Company B.
The following is a series of related transactions between Company A, a wholesaler, and Company B, a chain of retail shoe stores: April 9. Company A sold to Company B 300 units of product X on account, terms 3/15, n/60. The cost of product to company A was $90 per unit and the sales price was $130 per unit. April 12. Kazpost Express charged $900 for delivering this merchandise to Company B. This charge was fully paid by Company B. April 20. Company B returned 60 units of product to Company A because they were defective. Company A allowed to Company B full credit for this return. April 22. Company B paid the remaining balance due to Company A within the discount period. Instructions Record this series of transactions in the general journal of Company A (The company records sales at sales gross price.) Record this series of transactions in the general journal of Company B (The company records purchases of merchandise at net cost and uses a Transportation expense account to record charges from Kazpost.) Assume Company B failed to make a payment on April 22 and did it on April 30 instead. Make a journal entries for April 30 for both Company A and Company B.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following is a series of related transactions between Company A, a wholesaler, and Company B, a chain of retail shoe stores:
April 9. Company A sold to Company B 300 units of product X on account, terms 3/15, n/60. The cost of product to company A was $90 per unit and the sales price was $130 per unit.
April 12. Kazpost Express charged $900 for delivering this merchandise to Company B. This charge was fully paid by Company B.
April 20. Company B returned 60 units of product to Company A because they were defective. Company A allowed to Company B full credit for this return.
April 22. Company B paid the remaining balance due to Company A within the discount period.
Instructions
- Record this series of transactions in the general journal of Company A (The company records sales at sales gross price.)
- Record this series of transactions in the general journal of Company B (The company records purchases of merchandise at net cost and uses a Transportation expense account to record charges from Kazpost.)
- Assume Company B failed to make a payment on April 22 and did it on April 30 instead. Make a
journal entries for April 30 for both Company A and Company B.
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