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2. Question 1 Newman Hardware Store completed the following transactions in December 2019. It uses perpetual inventory system. It records both purchase and sales at gross amount. 1 Dec Purchased goods from Jerry Wholesale for $4,200 with the terms of 2/15, n/30. Sold goods on account to Mack Ltd at $2,100, terms 1/20, n/30. The cost of goods sold was $1,300. Returned the defective goods costing $300 purchased on 1 December to Jerry Wholesale. Paid the outstanding amount owed to Jerry Wholesale in full. Mack Ltd returned the unsatisfactory goods from the 2 December sales. The selling price was $400 and the cost of the goods was $180. Paid $200 for transportation fee, of which half is for 2 December sale and the remaining for 1 December purchase. Received collections in full, from the customers billed on 2 December. 14 15 21 Purchased goods from Jerry Wholesale for $8,400 with the terms of 2/15, n/30, FOB Destination Point, with goods shipped on the same day and received on 3 January 2020. Found inventory shortfall of $200 in the month-end physical count. 31 Required Prepare the journal entries to record the above transactions. a) b) Will your journal entries on 30 December be different if the purchase made on 31 December had FOB Shipping point terms? Explain. If yes, show the entries.

2. Question 1 Newman Hardware Store completed the following transactions in December 2019. It uses perpetual inventory system. It records both purchase and sales at gross amount. 1 Dec Purchased goods from Jerry Wholesale for $4,200 with the terms of 2/15, n/30. Sold goods on account to Mack Ltd at $2,100, terms 1/20, n/30. The cost of goods sold was $1,300. Returned the defective goods costing $300 purchased on 1 December to Jerry Wholesale. Paid the outstanding amount owed to Jerry Wholesale in full. Mack Ltd returned the unsatisfactory goods from the 2 December sales. The selling price was $400 and the cost of the goods was $180. Paid $200 for transportation fee, of which half is for 2 December sale and the remaining for 1 December purchase. Received collections in full, from the customers billed on 2 December. 14 15 21 Purchased goods from Jerry Wholesale for $8,400 with the terms of 2/15, n/30, FOB Destination Point, with goods shipped on the same day and received on 3 January 2020. Found inventory shortfall of $200 in the month-end physical count. 31 Required Prepare the journal entries to record the above transactions. a) b) Will your journal entries on 30 December be different if the purchase made on 31 December had FOB Shipping point terms? Explain. If yes, show the entries.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 73BPSB: ( Appendix 6B) Inventory Costing Methods Grencia Company uses a periodic inventory system. For 2018...
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2. Question 1 Newman Hardware Store completed the following transactions in December 2019. It uses perpetual inventory system. It records both purchase and sales at gross amount. 1 Dec Purchased goods from Jerry Wholesale for $4,200 with the terms of 2/15, n/30. Sold goods on account to Mack Ltd at $2,100, terms 1/20, n/30. The cost of goods sold was $1,300. Returned the defective goods costing $300 purchased on 1 December to Jerry Wholesale. Paid the outstanding amount owed to Jerry Wholesale in full. Mack Ltd returned the unsatisfactory goods from the 2 December sales. The selling price was $400 and the cost of the goods was $180. Paid $200 for transportation fee, of which half is for 2 December sale and the remaining for 1 December purchase. Received collections in full, from the customers billed on 2 December. 14 15 21 Purchased goods from Jerry Wholesale for $8,400 with the terms of 2/15, n/30, FOB Destination Point, with goods shipped on the same day and received on 3 January 2020. Found inventory shortfall of $200 in the month-end physical count. 31 Required Prepare the journal entries to record the above transactions. a) b) Will your journal entries on 30 December be different if the purchase made on 31 December had FOB Shipping point terms? Explain. If yes, show the entries.
Transcribed Image Text:2. Question 1 Newman Hardware Store completed the following transactions in December 2019. It uses perpetual inventory system. It records both purchase and sales at gross amount. 1 Dec Purchased goods from Jerry Wholesale for $4,200 with the terms of 2/15, n/30. Sold goods on account to Mack Ltd at $2,100, terms 1/20, n/30. The cost of goods sold was $1,300. Returned the defective goods costing $300 purchased on 1 December to Jerry Wholesale. Paid the outstanding amount owed to Jerry Wholesale in full. Mack Ltd returned the unsatisfactory goods from the 2 December sales. The selling price was $400 and the cost of the goods was $180. Paid $200 for transportation fee, of which half is for 2 December sale and the remaining for 1 December purchase. Received collections in full, from the customers billed on 2 December. 14 15 21 Purchased goods from Jerry Wholesale for $8,400 with the terms of 2/15, n/30, FOB Destination Point, with goods shipped on the same day and received on 3 January 2020. Found inventory shortfall of $200 in the month-end physical count. 31 Required Prepare the journal entries to record the above transactions. a) b) Will your journal entries on 30 December be different if the purchase made on 31 December had FOB Shipping point terms? Explain. If yes, show the entries.
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