College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 11A, Problem 1SEB
PURCHASES TRANSACTIONS—GROS-PRICE AND NET-PRICE METHODS Gloria’s Repair Shop had the following transactions during May:
May 2 Purchased merchandise on account from Delgado’s Supply for $900, terms 2/10, n/30.
6 Purchased merchandise on account from Goro’s Auto Care for $1,200, terms 1/10, n/30.
11 Paid the amount due to Delgado’s Supply for the purchase on May 2.
27 Paid the amount due to Goro’s Auto Care for the purchase on May 6.
- 1. Prepare general
journal entries for these transactions using the gross-price method. - 2. Prepare general journal entries for these transactions using the net-price method.
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Recording journal entries for net sales with credit sales and sales discounts.
The following transactions were selected from the records of Evergreen Company
July 12
Sold merchandise to Wally Butler, who paid the $1,000 purchase with cash. The goods cost Evergreen Company $600.
July 15
Sold merchandise to Claudio’s Chair Company at a selling price of $5,000 on terms 3/10, n/30. The goods cost Evergreen Company $3,500.
July 16
Sold merchandise to Otto’s Ottomans at a selling price of $3,000 on terms 3/10, n/30. The goods cost Evergreen Company $1,900.
July 23
Received cash from Claudio’s Chair Company for the amount due from July 15.
July 31
Received cash from Otto’s Ottomans for the amount due from July 16.
Required:
Prepare journal entries to record the transactions, assuming Evergreen Company records discounts using the net method in a perpetual inventory system. Forfeited discounts are recorded as Other Revenue. (If no entry is required for a transaction/event,…
Purchases Transactions
Barans Company purchased merchandise on account from a supplier for $9,200, terms 2/10, n/30. Barans Company returned $1,700
of the merchandise and received full credit.
a. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment?
b. What account is credited by Barans Company to record the return?
Merchandise Inventory
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(a) The return of merchandise reduces the original invoice amount to be paid. The discount is taken on the amount owed on
the merchandise after the return.
(b) Any discounts or returns are recorded directly by the buyer who reduces the balances of Accounts Payable and Merchandise
Inventory, using a debit memo based on the net cost of the merchandise.
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Peachtree Company uses sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal.
Journalize the following transactions that should be recorded in the purchases journal.
May
1 Purchased $19,600 of merchandise on credit from Krause, Inc., terms n/30.
8 Sold merchandise costing $1,280 to G. Seles for $3,400 on credit subject to a $49 sales discount if paid by the
end of the month.
14 Purchased $430 of store supplies from Chang Company on credit, terms n/30.
17 Purchased $450 of office supplies on credit from Monder Company, terms n/30.
24 Sold merchandise costing $590 to D. Air for $1,220 cash.
28 Purchased store supplies from Porter's for $128 cash.
29 Paid Krause, Inc., $19,600 cash for the merchandise purchased on May 1.
Date
Account
Date of
Invoice
PURCHASES JOURNAL
Accounts
Payable Cr. Inventory Dr.
Terms
Office
Supplies Dr.
Other
Accounts Dr.
Chapter 11A Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
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- PURCHASES TRANSACTIONSGROS-PRICE AND NET-PRICE METHODS Romeros Heating and Cooling had the following transactions during April: Apr. 2Purchased merchandise on account from Alanon Valve for 1,000, terms 2/10, n/30. 5Purchased merchandise on account from Leons Garage for 1,400, terms 1/10, n/30. 11Paid the amount due to Alanon Valve for the purchase on April 2. 25Paid the amount due to Leons Garage for the purchase on April 5. 1. Prepare general journal entries for these transactions using the gross-price method. 2. Prepare general journal entries for these transactions using the net-price method.arrow_forwardPURCHASES TRANSACTIONS Ann Benton, owner of Bentons Galleria, made the following purchases of merchandise on account during the month of October: Oct. 2Purchase Invoice No. 321, 1,950, from Boggs Distributors. 7Purchase Invoice No. 152, 2,915, from Wolfs Wholesaler. 10Purchase Invoice No. 634, 3,565, from Komuro Co. 16Purchase Invoice No. 349, 2,845, from Fritz McCord, Inc. 24Purchase Invoice No. 587, 3,370, from Boggs Distributors. 26Purchase Invoice No. 764, 2,240, from Sanderson Company. 31Purchase Invoice No. 672, 1,630, from Wolfs Wholesaler. Required 1. Record the transactions starting with page 16 of a general journal. 2. Post from the general journal to the general ledger accounts and to the accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.arrow_forwardPURCHASES TRANSACTIONS J. B. Speck, owner of Specks Galleria, made the following purchases of merchandise on account during the month of September: Sept. 3Purchase Invoice No. 415, 2,650, from Smith Distributors. 8Purchase Invoice No. 132, 3,830, from Michaels Wholesaler. 11Purchase Invoice No. 614, 3,140, from J. B. Sanders Co. 18Purchase Invoice No. 329, 2,250, from Bateman Jones, Inc. Sept. 23Purchase Invoice No. 767, 4,160, from Smith Distributors. 27Purchase Invoice No. 744, 1,980, from Anderson Company. 30Purchase Invoice No. 652, 2,780, from Michaels Wholesaler. Required 1. Record the transactions starting with page 16 of a general journal. 2. Post from the general journal to the general ledger accounts and to the accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.arrow_forward
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- JOURNALIZING PURCHASES RETURNS AND ALLOWANCES AND POSTING TO GENERAL LEDGER AND ACCOUNTS PAYABLE LEDGER Using page 3 of a general journal and the following general ledger and accounts payable ledger accounts, journalize and post the following transactions: July 7Returned merchandise to Starcraft Industries, 700. 15Returned merchandise to XYZ, Inc., 450. 27Returned merchandise to Datamagic, 900.arrow_forwardPrepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.arrow_forwardPreston Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: Required 1. Journalize the transactions for May in the cash receipts journal and the sales journal. Assume the periodic inventory method is used. 2. Total and rule the journals. 3. Prove the equality of the debit and credit totals.arrow_forward
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