BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
641 views

Use the following information for Cornerstone Exercises 6-20 and 6-21:

Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April:

a. On April 1, Mathis purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225.

b. On April 1, Mathis paid freight charges of S250 cash to have the goods delivered to its warehouse.

c. On April 8, Mathis returned $800 of the merchandise which had originally cost Reece $500.

d. On April 10, Mathis paid Reece the balance due.

Recording Sales Transactions

Refer to the information for Mathis and Reece companies on the previous page.

Required:

Prepare the journal entries to record these transactions on Reece’s books. Assume that Reece uses the net method to record sales on account and no sales returns are expected.

To determine

Concept introduction:

Perpetual Inventory System:

The perpetual inventory system records and updates the inventory after each and every transaction. The inventory balance is updated after each transaction and it is kept up to date at every time.

To prepare:

The Journal entry to record the transactions in the book of Reece Company.

Explanation

The Journal entries to record the transactions in the book of Reece Company are explained as follows:

Reece Company
Journal Entries
Perpetual Inventory System
Date Account Title Debit Credit
Apr. 1 Accounts Receivable (3100-3100*2%) $ 3,038
Sales Revenue $ 3,038
(Being Sales made on account)
Cost of Goods Sold $ 2,225
Merchandise Inventory $ 2,225
(Being merchandise sold)
Apr...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Why might economic advisers to the president disagree about a question of policy?

Brief Principles of Macroeconomics (MindTap Course List)

What is trade associations role in encouraging ethics?

Foundations of Business (MindTap Course List)

Why might management analyze product profitability?

Financial And Managerial Accounting

What are the main components of a database system?

Database Systems: Design, Implementation, & Management

VocabularyState the meaning of the following terms: Fiber Glass _____ Thermoplastics _____ Polymer _____ Silico...

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

What is a post-processor used for?

Precision Machining Technology (MindTap Course List)

QR code (178) a. destructive event or prank a virus was created to deliver b. copyrighted software that is dist...

Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)