Question

Prepare the journal entries to record the following transactions on Pharoah Company’s books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

(a)		On March 2, Shamrock Company sold $897,900 of merchandise to Pharoah Company on account, terms 2/10, n/30. The cost of the merchandise sold was $594,200.
(b)		On March 6, Pharoah Company returned $100,900 of the merchandise purchased on March 2. The cost of the merchandise returned was $67,500.
(c)		On March 12, Shamrock Company received the balance due from Pharoah Company.

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	choose a transaction date                                                          March 2March 6March 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(b)	choose a transaction date                                                          March 2March 6March 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(c)	choose a transaction date                                                          March 2March 6March 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount

Answer 1

Solution:

No.	Date	Account title	Debit	Credit
(a)	2-Mar	Inventory	897,900
		Accounts payable		897,900
(b)	6-Mar	Accounts payable	100,900
		Inventory		100,900
(c)	12-Mar	Accounts payable (897900-100900)	797,000
		Inventory (797000*2%)		15,940
		Cash		781,060