Question

Purchase Discounts The following are transactions of Jackman, Inc. Identify and analyze each of the following transactions of Jackman, Inc. (All purchases on credit are made with terms of 1/10, 1/30, and Jackman uses system of inventory.) July 3: Purchased merchandise on credit from Tabby Company for $6,000. Activity Operating Account Payable Increase, Purchases Increase Statement(s) Balance Sheet and Income Statement Accounts How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter "O". If the effect is negative, use the minus sign Balance Sheet Stockholders Assets Revenues Liabilities Equity No Entry No Entry 6,000 Accounts Payable July 12: Paid amount owed to Tabby Company, Activity Operating Accounts Cash Decrease, Account Payable Decrease Statement(s) Balance Sheet only How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank or e effect is negative, use the minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial state

Answer 1

Stockholders' Assets Liabilities equity = Net Income Expenses Purchases $6,000 $6,000 Revenues No Entry No Entry Accouts Payable $6,000 $6,000 Date General Journal Debit Credit 2 3-Jul Purchases (Income Statement] $6,000 3 Accounts Payable [Balance Sheet] $6,000 4 5 Activity Operating 6 Accounts Purchases Increase, Accounts Payable Increase 7 Statement(s) Income Statement and Balance Sheet 8 9 10 12-Jul Accounts Payable [Balance Sheet] $6,000 11 Purchase Discount (6,000 * 1%) [Income Statement] $60 12 Cash (6,000 - 60) (Balance Sheet] $5,940 13 14 Activity Operating 15 Accounts Accounts Payable Decrease, Purchase Discount Increase and Cash Decrease 16 Statement(s) Balance Sheet and Income Statement 17 Cash $5,940 Accounts Payable $6,000 $60 Purchase Discount $60 No Entry $60