Answered: On June 10, Wildhorse Company purchased…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 2DQ: For each of the following accounts, identify whether the normal balance is a debit or a credit. Also...

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On June 10, Wildhorse Company purchased $8,500 of merchandise on account from Swifty Company, FOB shipping point, terms 2/10, n/30. Wildhorse pays the freight costs of $570 on June 11. Damaged goods totaling $450 are returned to Swifty for credit on June 12. The fair value of these goods is $75. On June 19, Wildhorse pays Swifty Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Prepare separate entries for each transaction for Swifty Company. The merchandise purchased by Wildhorse on June 10 had cost Swifty $5,200. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date
Account Titles and Explanation
Debit
Credit
(To record credit sale)
(To record cost of merchandise sold)
(To record merchandise returned)
(To record cost of merchandise returned)

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