Question

GL04-01-Based on Problem 4-1A LO P1, P2 Prepare journal entries to record the following merchandising transactions of Ryan's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable-Wright.) Jul. 1 Purchased merchandise from Wright Company for $11,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. Jul. 2 Sold merchandise to Lee Co. for$3,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $2,840 ul. 3 Paid $1,125 cash for freight charges on the purchase of July 1. Jul. 8 Sold merchandise that had cost $4,000 for $6,700 cash. Jul. 9 Purchased merchandise from Lane Co. for $4,700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9 Jul. 11 Received a $9e credit memorandum from Lane Co. for the return of part of the merchandise purchased on July 9 Dul. 12 Received the balance due from Lee Co. for the invoice dated July 2, net of the discount. Jul. 16 Paid the balance due to Wright Company within the discount period. Dul. 19 Sold merchandise that cost $4, 300 to Martin Co. for $6,200 under credit terms of 2/15, n/60, FOB 1 shipping point, invoice dated July 19 Jul. 21 Issued a $1,20e credit memorandum to Martin Co. for an allowance on goods sold on July 19. Dul. 24 Paid Lane Co. the balance due, net of discount. Dul. 38 Received the balance due from Martin Co. for the invoice dated July 19, net of discount. Dul. 31 Sold merchandise that cost $7,200 to Lee Co. for $12,e00 under credit terms of 2/10, n/6e, FOB shipping point, invoice dated July 31. 흐

Answer 1

Answer :

Preparing journal entries to record merchandise transactions of Taylor,s :

Date	Particulars	Amount
		Debit	Credit
1st July	Merchandise inventory To accounts payable walker	$ 11,000	$ 11,000
2nd July	Accounts receivable To Perry sold	$ 3,400	$ 3,400
2nd July	Cost of goods sold To Merchandise inventory	$ 1,320	$ 1,320
3rd July	Merchandise inventory To Cash	$ 1,125	$1,125
8th July	Cash To Sales	$ 6,700	$ 6,700
	Cost of goods sold To merchandise inventory	$ 4,000	$ 4,000
9th July	Merchandise inventory To Ryan account paid	$ 4,700	$ 4,700
11th July	Accounts paid To Merchandise inventory	$ 900	$ 900
12th July	Sales & Cash To Accounts receivable	= $ 3,400 * 2% = 68 = $ 3,400 - 68 = $ 3,332	$ 3,400
16th July	Accounts payable walker To Merchandise inventory	$ 11,000	$ 11,000
19th July	Accounts receivable To Sales	$ 6,200	$ 6,200
	Cost of goods sold To Merchandise inventory	$ 4,300	$ 4,300
21st July	Return sales & Allowances To Accounts receivable	$ 1,200	$ 1,200
24th July	Accounts payable To Merchandise inventory & Cash	=$ 4,700 - 900 = $ 3,800	$ 3,800 * 2% = $ 76 $ 3,800 - 76 = $ 3,724
30th July	Sales discount & Cash To Account receivable	$ 5000 * 2 % = $ 100 $ 5000 - 100 = $ 4,900	$ 6,200 - 1200 = $ 5,000
31st July	Accounts receivable To Sales	$ 12,000	$ 12,000
31st July	Cost of goods sold To Merchandise inventory	$ 7,200	$ 7,200