Question

es P5-3A Presented here are selected transactions for Norlan Inc. during September of the current year. Norlan uses a perpetual inventory system. Purchased equipment on account for $65,000, terms n/30, FOB destination. Freight charges of $950 were paid by the appropriate party on the September 2 purchase of equipment. Sept. 2 3 Purchased supplies for $4,000 cash. 4 Purchased inventory on account from Hillary Corp. at a cost of $65,000, terms 1/15, n/30, FOB shipping point. Freight charges of $1,600 were paid by the appropriate party on the September 6 inventory purchase. Returned damaged goods costing $5,000 that were originally purchased from Hillary on September 4. Received a credit on account. Sold goods costing $15,000 to Fischer Limited for $20,000 on account, terms 2/10, n/30, FOB destination. 6 7 lonlbwsbn d o bonsblino dsidw slev ubog to egudinom Freight charges of $375 were paid by the appropriate party on the September 9 sale of inventory. Received the balance due from Fischer. 10 17 lo 20 Paid Hillary the balance due. Purchased inventory for $6,000 cash. Sold inventory costing $20,000 to Kun-Tai Inc. for $27,000 on account, terms n/30, FOB shipping 21 22 o Tadn point. Freight charges of $500 were paid by the appropriate party on the September 22 sale of inventory. Kun-Tai returned goods sold for $10,000 that cost $7,500. The merchandise was restored to 23 28 inventory.

Answer 1

A		amount in $
S.l No.	Date	Particulars	Debit	Credit
1	2-Sep	Equipment A/c	65000
		To Vendor A/c		65000
		Being Machinery Purchased
2	3-Sep	No entry
	Freight charges have been paid by the vendor so no entry in our books since our company has not incurred anything on freights
3	4-Sep	Purchases A/c	4000
		To Cash A/c		4000
		Being supplies purchased for cash
4	6-Sep	Purchases A/c	65000
		To Hillary corp A/c		65000
		Being inventory procured on credit
5	7-Sep	No entry
	Freight charges have been paid by the vendor so no entry in our books since our company has not incurred anything on freights
6	8-Sep	Hillary corp A/c	5000
		To Purchase returns A/c		5000
		Being purchase returns accounted
7	9-Sep	Fischer A/c	20000
		To Sales A/c		20000
		Being sales accounted
8	10-Sep	No entry
	Freight charges have been paid by the Customer so no entry in our books since our company has not incurred anything on freights
9		Cash A/c	19600
		Sales discount (20000*2%)	400
		To Fischer A/c		20000
		Being cash received from customer
		Assumed that discount has been availed by paying with in 10 days
10		Hillary corp A/c	60000
		To Cash A/c		59400
		TO purchase discount (60000*1%)		600
		Being amount paid to vendor
11		Purchases A/c	6000
		To Cash A/c		6000
		Being supplies purchased for cash
12		Kun Tai Inc A/c	27000
		To Sales A/c		27000
		Being sales accounted
13		No entry
	Freight charges have been paid by the Customer so no entry in our books since our company has not incurred anything on freights
14		Sales returns A/c	10000
		Kun Tai Inc A/c		10000
		Being Sales returns accounted
B	If the discount is not availed while paying to Hilary Corp the below entry is follows
		Hillary corp A/c	60000
		To Cash A/c		60000
		Being amount paid to vendor
	The difference excess paid is 600 which could have availed as discount if we had payed on september 20