Question

NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:

DATE		TRANSACTIONS
2019
June	1	Issued Check 101 to purchase merchandise, $2,700.
	3	Purchased merchandise for $2,100 from BioCenter Inc., Invoice 606; terms 3/10, n/30.
	5	Purchased merchandise for $4,050, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30.
	9	Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102.
	10	Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $350 that was returned; the goods were purchased on Invoice 1011, dated June 5.
	11	Purchased merchandise for $1,500 from BioCenter Inc., Invoice 612; terms 2/10, n/30.
	14	Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103.
	15	Purchased merchandise with a list price of $7,400 and trade discounts of 15 percent and 10 percent from Park Research, Invoice 1029, terms n/30.
	20	Issued Check 104 to purchase merchandise, $1,200.
	25	Returned merchandise purchased on June 20 as defective, receiving a cash refund of $260.
	30	Purchased merchandise for $1,400, plus a freight charge of $67, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30 Journal entry worksheet ..... Issued Check 101 to purchase merchandise, $2,700. Note: Enter debits before credits. DATE GENERAL JOURNAL DEBIT CREDIT June 01, 2019 General Journal Analyze What was the amount of trade discounts received on the June 15 purchase from Park Research? Trade discount received

Answer 1

Journal Entries:
Date	Accounts Titles	Debit $	Credit $
1-Jun	Merchandise inventory	2700
	Cash		2700
	(being purchse of inventory on cash)
3-Jun	Merchandise inventory	2100
	AP		2100
	(being purchase of inventory on credit)
5-Jun	Merchandise inventory	4050
	Merchandise inventory	100
	AP		4050
	Cash		100
	(being purchase of inventory with freight charge)
9-Jun	AP	2100
	Trade discount		63
	Cash		2037
	(being Biocenter paid after trade discount)
10-Jun	AP	350
	Merchandise return		350
	(being return of inventory to new concepts on Memo 227)
11-Jun	Merchandise inventory	1500
	AP		1500
	(being purchase of inventory on credit on invoice 612)
14-Jun	AP	3700
	Trade discount		74
	Cash		3626
	(being payment made to New concept after trade discount)
15-Jun	Merchandise inventory	5661
	AP		5661
	(7400*15%)*10% = 5661
20-Jun	Merchandise inventory	1200
	Cash		1200
	(being purchase of inventory on cash)
25-Jun	Cash	260
	Merchandise return		260
	(being return of inventory to defective of June 20 purchase)
30-Jun	Merchandise inventory	1400
	Merchandise inventory	67
	AP		1400
	Cash		67
	(being purchase of inventory on credit with freight $67)
The amount of trade discounts received on the June 15 purchase from Park research =
	[7400 - (7400*85%)*90%] = (7400 - 5661) = $1739