Business
Engineering
Math
Science
Social Science
Cornerstones of Financial Accounti...
Solutions
Cornerstones of Financial Accounti...
Recording Purchase and Sales Transactions
Raymond Company and Geeslin Company both use a perpetual inventory system. The following transactions occurred during the month of January:
Jan. 1 Raymond purchased $5,000 of merchandise on account from Geeslin with credit terms of 2/10, n/30. The cost of the merchandise was $3,750. Assume that Geeslin uses the net method to record sales discounts and no returns are expected at the time of sale.
8 Raymond returned $500 of the to Geeslin. The cost of the merchandise returned was $375.
10 Raymond paid invoices totaling $3,000 to Geeslin for the merchandise purchased on January 1.
30 Raymond paid Geeslin the balance due.
Required:
Prepare the journal entries to record these transactions on the books of Raymond and Geeslin.
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 entries for both buyer and seller under perpetual inventory system.
The journal entries for both buyer and seller under perpetual inventory system are explained as follows:
| Raymond Company | |||
| Journal Entries | |||
| Perpetual Inventory System | |||
| Date | Account Title | Debit | Credit |
| Jan. 1 | Merchandise Inventory | $ 5,000 | |
| Accounts Payable-Geeslin Company | $ 5,000 | ||
| Cash | |||
| (Being merchandises purchased on account) | |||
| Jan. 8 | Accounts Payable-Geeslin Company | $ 500 | |
| Merchandise Inventory | $ 500 | ||
| (Being merchandises returned on account) | |||
| Jan. 10 | Accounts Payable-Geeslin Company | $ 3,000 | |
| Cash | $ 3,000 | ||
| (Being amount paid on account) | |||
| Jan. 30 | Accounts Payable-Reece Company (5000-500-3000) | $ 1,500 | |
| Cash | $ 1,500 | ||
| (Being amount paid on account) | |||
| Geeslin Company | |||
| Journal Entries | |||
| Perpetual Inventory System | |||
| Date | Account Title | Debit | Credit |
| Jan... | |||
Chapter 6 Solutions
Additional Business Solutions
Find more solutions based on key concepts
Show solutions addWhat are the basic components of a database management system (DBMS)? Discuss the relationship between the comp...
Accounting Information Systems
Calculate payroll K. Mello Company has three employeesa consultant, a computer programmer, and an administrator...
Financial & Managerial Accounting
Loan application Daryl Kirby opened Squid Realty Co. on January 1, 20Y3. At the end of the first year, the busi...
Corporate Financial Accounting
You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and for...
Principles of Microeconomics (MindTap Course List)
How do human resources managers go about matching a firm's supply of workers with demand?
Foundations of Business (MindTap Course List)
NONCONSTANT GROWTH STOCK VALUATION Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per...
Fundamentals of Financial Management (MindTap Course List)
(Total Cost and Marginal Cost) Complete the following table, where L is units of labor, Q is units of output, a...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
The population of a particular country consists of three ethnic groups. Each individual belongs to one of the f...
Probability and Statistics for Engineering and the Sciences
A survey conducted by Better Homes and Gardens Real Estate LLC showed that one in five U.S. homeowners have eit...
STATISTICS F/BUSINESS+ECONOMICS-TEXT
What does the level of a nations GDP measure? What does the growth rate of GDP measure? Would you rather live i...
Principles of Macroeconomics (MindTap Course List)
The present value of a perpetuity is equal to the payment on the annuity, PMT, divided by the interest rate, I:...
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Why should policymakers think about incentives?
Principles of Economics (MindTap Course List)
STATEMENT OF CASH FLOWS Hampton Industries had 39,000 in cash at year-end 2015 and 11,000 in cash at year-end 2...
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Customer Bad News: Selecting Sturdy Stepper for Snap Fitness Gym. You are delighted to receive a large order fr...
Essentials of Business Communication (MindTap Course List)
A company faces two kinds of risk. A firm-specific risk is that a competitor might enter its market and fake so...
Brief Principles of Macroeconomics (MindTap Course List)
Lead time reduction for an insurance company Shield Insurance Company takes 10 days to make payments on insuran...
Financial And Managerial Accounting
Identify the benefits associated with a sound knowledge management program.
Fundamentals of Information Systems
What common problems do a collection of spreadsheets created by end users share with the typical file system?
Database Systems: Design, Implementation, & Management
Which paper is the foundation of all subsequent studies of computer security?
Principles of Information Security (MindTap Course List)
Write the business rules that are reflected in the ERD shown in Figure P2.17. FIGURE P2.17 THE CROWS FOOT ERD F...
Database Systems: Design, Implementation, & Management
What could IBM have done to prevent the release of its defective payroll system?
Fundamentals of Information Systems
What is the format of the SET clause that changes the value in a column to null in an UPDATE command?
A Guide to SQL
Identify three specific smartphone applications that would be of significant help to you in your current or nex...
Principles of Information Systems (MindTap Course List)
Briefly describe the process of aligning a milling vise with the table movement using a dial indicator.
Precision Machining Technology (MindTap Course List)
Calculate the mass moment of inertia of the thin ring shown in the accompanying diagram. Express your answer in...
Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)
Do research to learn about the use of focus groups to gain insight into how people view a new product or idea. ...
Principles of Information Systems (MindTap Course List)
True or False? A reverse idler gear changes the direction of torque flow to the opposite direction of engine ro...
Automotive Technology: A Systems Approach (MindTap Course List)
In concrete work, Fuller and Thompson (1907) suggested that a dense packing of grains can be achieved if the pe...
Fundamentals of Geotechnical Engineering (MindTap Course List)
A thin tubular shaft with a circular cross section (see figure) and with inside diameter 100 mm is subjected to...
Mechanics of Materials (MindTap Course List)
What is incident classification?
Management Of Information Security
As more companies outsource systems development, will there be less need for in-house systems analysts? Why or ...
Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)
No point along the wall line shall be more than 6 ft (1.8 m) from a receptacle outlet. This requirement (does a...
EBK ELECTRICAL WIRING RESIDENTIAL
The following are the results of a sieve and hydrometer analysis. a. Draw the grain-size distribution curve. b....
Principles of Geotechnical Engineering (MindTap Course List)
The three bars are welded together to form a rigid unit that is supported by three slider bearings. Neglecting ...
International Edition---engineering Mechanics: Statics, 4th Edition
An airplane is 20,000 feet above the ground when a 100 kg object is dropped from it. If there were no such thin...
Fundamentals of Chemical Engineering Thermodynamics (MindTap Course List)
Who determines the compliance of an installation to applicable electrical codes with regard to adequate overloa...
Electric Motor Control
Two materials, A and B, are to be separated using two unit operations, 1 and 2. The feed has 10 tons/h A and 4 ...
Solid Waste Engineering
Use A572 Grade 50 steel and compute the nominal strength of the column shown in Figure P4.8-2. The member ends ...
Steel Design (Activate Learning with these NEW titles from Engineering!)
While discussing NTC thermistors: Technician A says that some systems use this type of thermistor as a protecti...
Automotive Technology
If you were to interview a candidate for a technology-related position, what types of questions would you ask?
Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)
Your organization has just ordered its first T1 connection to the Internet. Prior to that, your organization re...
Network+ Guide to Networks (MindTap Course List)
