Question

Brief Exercise 13-1 Martinez Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) On July 1, (1) Martinez purchased $80,000 of inventory, terms 1/10, n/30, FOB shipping point. (2) Martinez paid freight costs of $1,207. (b) On July 3, Martinez returned damaged goods and received credit of $8,000. (c) On July 10, Martinez paid for the goods. Prepare all necessary journal entries for Martinez. (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.)

Brief Exercise 13-1 Martinez Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) On July 1, (1) Martinez purchased $80,000 of inventory, terms 1/10, n/30, FOB shipping point. (2) Martinez paid freight costs of $1,207. (b) On July 3, Martinez returned damaged goods and received credit of $8,000. (c) On July 10, Martinez paid for the goods. Prepare all necessary journal entries for Martinez. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts, Credit account titles are automatically Indented when amount is entered. Do not Indent manually.) No. Date Account Titles and Explanation Debit Credit (a) (1) (a) (2) (b) C

Answer 1

In the books of Martinez Corporation

Credit Debit $80,000 $80,000 $ 1,207 $ 1,207 Date Description Jul-01 Purchases Accounts payable Freight-in Cash Jul-03 Accounts payable Purchases returns & allowances Jul-10 Accounts payable Cash Purchase discounts $ 8,000 $ 8,000 $72,000 $71,280 72000-720 $ 720 72000*1%