1. Explanation Journal entries in the books of Company S: Purchased merchandise on account worth $40,000. Date Account Title and Explanation Post ref Debit ($) Credit ($) May 11 Purchases 40,000 Account Payable 40,000 (To record purchase of merchandise inventory on account) Table (1) • Purchases are an expense account. Since the inventory is purchased, the value of expense is increased. So, debit the purchases account. • Account payable is a liability account. Since payment is to be made for purchases on account, so liability is to be increased. Therefore, account payable account is credited. Paid $345 cash for shipping charges: Date Account Title and Explanation Post ref Debit ($) Credit ($) May 11 Transportation-in 345 Cash 345 (To record shipping charges paid by buyer) Table (2) • Transportation cost is an expense account. Since the amount of freight is being paid, the value of expense is increased. So, debit the transportation cost. • Cash is an asset account. Since the cash is paid, the value of assets is decreased. So, credit the cash account. Purchase return made to Company T for $1400: Date Account Title and Explanation Post ref Debit ($) Credit ($) May 12 Account Payable 1,400 Purchase Return and Allowances 1,400 (To record return of merchandise worth $1400) Table (3) • Account payable is a liability account. Since the inventory which was purchased on credit is returned, this reduces the liability to be paid. So, debit the account payable account. • Purchase return and allowances is an income account. Since inventory is returned to the seller which means purchase is to be reversed and the income is to be increased... 2. To determine To prepare: Journal entries in the books of Company T.

Financial and Managerial Accounting: Information for Decisions

6th Edition

ISBN: 9780078025761

Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles

Publisher: McGraw-Hill Education

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Chapter 4, Problem 18E

To determine

To prepare:

Journal entries in the books of Company S and Company T.

To determine

To prepare:

Journal entries in the books of Company T.

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Chapter 4, Problem 17E

Chapter 4, Problem 19E

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Chapter 4 Solutions

Financial and Managerial Accounting: Information for Decisions

Ch. 4 - Prob. 1MCQ Ch. 4 - A company purchased $4,500 0f merchandise on May 1...Ch. 4 - Prob. 3MCQ Ch. 4 - Prob. 4MCQ Ch. 4 - Prob. 5MCQ Ch. 4 - Prob. 1DQ Ch. 4 - Prob. 2DQ Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - How does a company that uses a perpetual inventory...

Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Prob. 8DQ Ch. 4 - Prob. 9DQ Ch. 4 - Prob. 10DQ Ch. 4 - Prob. 11DQ Ch. 4 - Prob. 12DQ Ch. 4 - Prob. 13DQ Ch. 4 - Prob. 14DQ Ch. 4 - Prob. 15DQ Ch. 4 - Prob. 1QS Ch. 4 - Prob. 2QS Ch. 4 - Prob. 3QS Ch. 4 - Recording purchases, returns, and discounts taken...Ch. 4 - Prob. 5QS Ch. 4 - Prob. 6QS Ch. 4 - Prob. 7QS Ch. 4 - Prob. 8QS Ch. 4 - Prob. 9QS Ch. 4 - Prob. 10QS Ch. 4 - Prob. 11QS Ch. 4 - Prob. 12QS Ch. 4 - Prob. 13QS Ch. 4 - Prob. 14QS Ch. 4 - Prob. 15QS Ch. 4 - Prob. 16QS Ch. 4 - Prob. 17QS Ch. 4 - Prob. 18QS Ch. 4 - Prob. 2E Ch. 4 - Prob. 3E Ch. 4 - Prob. 4E Ch. 4 - Prob. 5E Ch. 4 - Prob. 6E Ch. 4 - Prob. 7E Ch. 4 - Prob. 8E Ch. 4 - Prob. 9E Ch. 4 - Prob. 10E Ch. 4 - Prob. 11E Ch. 4 - Prob. 12E Ch. 4 - Prob. 13E Ch. 4 - Prob. 14E Ch. 4 - Exercise 4-14 Computing and analysinig acid-test...Ch. 4 - Prob. 16E Ch. 4 - Prob. 17E Ch. 4 - Prob. 18E Ch. 4 - Prob. 19E Ch. 4 - Prob. 20E Ch. 4 - Prob. 1PSA Ch. 4 - Prob. 2PSA Ch. 4 - Prob. 3PSA Ch. 4 - Prob. 4PSA Ch. 4 - Prob. 5PSA Ch. 4 - Prob. 6PSA Ch. 4 - Prob. 1PSB Ch. 4 - Prob. 2PSB Ch. 4 - Prob. 3PSB Ch. 4 - Prob. 4PSB Ch. 4 - Prob. 5PSB Ch. 4 - Prob. 6PSB Ch. 4 - Prob. 4SP Ch. 4 - Prob. 1GLP Ch. 4 - Prob. 2GLP Ch. 4 - Prob. 3GLP Ch. 4 - Prob. 1BTN Ch. 4 - Prob. 2BTN Ch. 4 - Prob. 3BTN Ch. 4 - COMMUNICATING IN PRACTICE C2 P3 P5 BTN 4-4 You are...Ch. 4 - Prob. 5BTN Ch. 4 - TEAMWORK IN ACTION C1 C2 BTN 4-6 Official Brands’s...Ch. 4 - Prob. 7BTN Ch. 4 - Prob. 8BTN Ch. 4 - Prob. 9BTN

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