Prepare Journal entries to record the following merchandising transactions of Sanchez's, which uses the perpetual Inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable-Lee.) July 1 Purchased merchandise from Lee Company for $9,400 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. July 2 Sold merchandise to Brown Company for $2,600 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $1,560. July 3 Paid $885 cash for freight charges on the purchase of July 1. July 8 Sold merchandise that had cost $3,100 for $5,100 cash. July 9 Purchased merchandise from Carter Company for $3,900 under credit terms of 2/15, n/68, FOB destination, invoice dated July 9. July 11 Returned $800 of merchandise purchased on July 9 from Carter Company and debited its account payable for that amount. July 12 Received the balance due from Brown Company for the invoice dated July 2, net of the discount. July 16 Paid the balance due to Lee Company within the discount period. July 19 Sold merchandise that cost $3,200 to Clark Company for $4,600 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 21 Gave a price reduction (allowance) of $900 to Clark Company for merchandise sold on July 19 and credited Clark's accounts receivable for that amount. July 24 Paid Carter Company the balance due, net of discount. July 30 Received the balance due from Clark Company for the invoice dated July 19, net of discount. July 31 Sold merchandise that cost $6,208 to Brown Company for $10,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

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Chapter9: Sales And Purchases
Section: Chapter Questions
Problem 7E: Record the following transactions for a perpetual inventory system in general journal form. a. Sold...
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Prepare Journal entries to record the following merchandising transactions of Sanchez's, which uses the perpetual Inventory system
and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 In Accounts
Payable-Lee.)
July 1 Purchased merchandise from Lee Company for $9,400 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July
1.
July 2 Sold merchandise to Brown Company for $2,600 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2.
The merchandise had cost $1,560.
July 3 Paid $885 cash for freight charges on the purchase of July 1.
July 8 Sold merchandise that had cost $3,100 for $5,100 cash.
July 9 Purchased merchandise from Carter Company for $3,900 under credit terms of 2/15, n/60, FOB destination, invoice dated July
9.
July 11 Returned $800 of merchandise purchased on July 9 from Carter Company and debited its account payable for that amount.
July 12 Received the balance due from Brown Company for the invoice dated July 2, net of the discount.
July 16 Paid the balance due to Lee Company within the discount period.
July 19 Sold merchandise that cost $3,200 to Clark Company for $4,600 under credit terms of 2/15, n/60, FOB shipping point, invoice
dated July 19.
July 21 Gave a price reduction (allowance) of $900 to Clark Company for merchandise sold on July 19 and credited Clark's accounts
receivable for that amount.
July 24 Paid Carter Company the balance due, net of discount.
July 30 Received the balance due from Clark Company for the invoice dated July 19, net of discount.
July 31 Sold merchandise that cost $6,200 to Brown Company for $10,400 under credit terms of 2/10, n/60, FOB shipping point,
invoice dated July 31.
Transcribed Image Text:Prepare Journal entries to record the following merchandising transactions of Sanchez's, which uses the perpetual Inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 In Accounts Payable-Lee.) July 1 Purchased merchandise from Lee Company for $9,400 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. July 2 Sold merchandise to Brown Company for $2,600 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $1,560. July 3 Paid $885 cash for freight charges on the purchase of July 1. July 8 Sold merchandise that had cost $3,100 for $5,100 cash. July 9 Purchased merchandise from Carter Company for $3,900 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11 Returned $800 of merchandise purchased on July 9 from Carter Company and debited its account payable for that amount. July 12 Received the balance due from Brown Company for the invoice dated July 2, net of the discount. July 16 Paid the balance due to Lee Company within the discount period. July 19 Sold merchandise that cost $3,200 to Clark Company for $4,600 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 21 Gave a price reduction (allowance) of $900 to Clark Company for merchandise sold on July 19 and credited Clark's accounts receivable for that amount. July 24 Paid Carter Company the balance due, net of discount. July 30 Received the balance due from Clark Company for the invoice dated July 19, net of discount. July 31 Sold merchandise that cost $6,200 to Brown Company for $10,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.
Requirement
General
Journal
General
Ledger
Trial Balance
July 2) Sold merchandise to Brown Company for $2,600
under credit terms of 2/10, n/60, FOB shipping point, invoice
dated July 2.
July 1) Purchased merchandise from Lee Company for
$9.400 under credit terms of 1/15, n/30, FOB shipping point, No impact on income
invoice dated July 1.
July 2) The cost of the merchandise sold to Brown Company
was $1,560.
For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any.
Input decreases to net income as minus sign. Upon completion, compare the gross profit with the amount reported on
the partial income statement.
July 3) Paid $805 cash for freight charges on the purchase of
July 1.
July 8) Sold merchandise for $5,100 cash.
July 8) The cost of the merchandise sold was $3,100.
July 9) Purchased merchandise from Carter Company for
$3,900 under credit terms of 2/15, n/60, FOB destination,
invoice dated July 9.
July 11) Received a $800 credit memorandum from Carter
Company for the return of part of the merchandise
purchased on July 9.
July 16) Paid the balance due to Lee Company within the
discount period.
July 19) Sold merchandise to Clark Company for $4,600
under credit terms of 2/15, n/60, FOB shipping point, invoice
dated July 19.
July 19) The cost of the merchandise sold to Clark Company
was $3,200.
July 21) Issued a $900 credit memorandum to Clark
Company for an allowance on goods sold on July 19.
July 24) Paid Carter Company the balance due, net of
discount.
July 30) Received the balance due from Clark Company for
the invoice dated July 19, net of discount.
Schedule of
Receivables
July 31) Sold merchandise to Brown Company for $10,400
under credit terms of 2/10, n/60, FOB shipping point, invoice
dated July 31.
July 31) The cost of the merchandise sold to Brown
Company was $6,200.
Total gross profit
July 12) Received the balance due from Brown Company for Decreases net income
the invoice dated July 2, net of the discount.
Impact on income
Increases net income
Decreases net income
No impact on income
Increases net income
Schedule of
Payables
Decreases net income
No impact on income
No impact on income
< Income Statement
Increase
(decrease) to
income
$
09
Income
Statement
$
Impact on Income
0
2,600
(1.560)
0
5,100
(3.100)
0
0
(86)
Impact on
Income
2,974
Transcribed Image Text:Requirement General Journal General Ledger Trial Balance July 2) Sold merchandise to Brown Company for $2,600 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. July 1) Purchased merchandise from Lee Company for $9.400 under credit terms of 1/15, n/30, FOB shipping point, No impact on income invoice dated July 1. July 2) The cost of the merchandise sold to Brown Company was $1,560. For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as minus sign. Upon completion, compare the gross profit with the amount reported on the partial income statement. July 3) Paid $805 cash for freight charges on the purchase of July 1. July 8) Sold merchandise for $5,100 cash. July 8) The cost of the merchandise sold was $3,100. July 9) Purchased merchandise from Carter Company for $3,900 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11) Received a $800 credit memorandum from Carter Company for the return of part of the merchandise purchased on July 9. July 16) Paid the balance due to Lee Company within the discount period. July 19) Sold merchandise to Clark Company for $4,600 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 19) The cost of the merchandise sold to Clark Company was $3,200. July 21) Issued a $900 credit memorandum to Clark Company for an allowance on goods sold on July 19. July 24) Paid Carter Company the balance due, net of discount. July 30) Received the balance due from Clark Company for the invoice dated July 19, net of discount. Schedule of Receivables July 31) Sold merchandise to Brown Company for $10,400 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. July 31) The cost of the merchandise sold to Brown Company was $6,200. Total gross profit July 12) Received the balance due from Brown Company for Decreases net income the invoice dated July 2, net of the discount. Impact on income Increases net income Decreases net income No impact on income Increases net income Schedule of Payables Decreases net income No impact on income No impact on income < Income Statement Increase (decrease) to income $ 09 Income Statement $ Impact on Income 0 2,600 (1.560) 0 5,100 (3.100) 0 0 (86) Impact on Income 2,974
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