Question

Accounts Receivable	109760
Sales		109760
Cost of Goods Sold	67200
Inventory		67200
Accounts Receivable-Blue Star Co.	1800
Cash		1800
Cash	111560
Accounts Receivable-Blue Star Co.		111560
Inventory	1800
Accounts Payable-Shore Co.		1800
Accounts Payable-Shore Co.	111560
Cash		111560

Shore Co. sold merchandise to Blue Star Co. on account, $112,000, terms Freight terms in which the buyer pays the transportation costs from the shipping point to the final destination.FOB shipping point, 2/10, n/30. The cost of the goods sold is $67,200. Shore paid freight of $1,800.

Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due, using the net method under a perpetual inventory system. If an amount box does not require an entry, leave it blank.

The ones in bold and italic are incorrect.

Note who is the buyer and who is the seller. The payment is less returns and discounts, and discounts are not taken on returns. If applicable, determine whether the buyer or seller is to pay any freight.

Journalize Blue Star Co.'s entry for the sale, purchase, and payment of amount due. If an amount box does not require an entry, leave it blank.

Answer 1

Correct entry for entry marked bold

Account Titles	Debit	Credit
Inventory	$     111,560
Accounts Payable-Shore Co.		$     111,560

The only difference is for amount. It is also assumed that Blue Star co, also uses net method