College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 11A, Problem 1SEA
PURCHASES TRANSACTIONS—GROS-PRICE AND NET-PRICE METHODS Romero’s Heating and Cooling had the following transactions during April:
Apr. 2 Purchased merchandise on account from Alanon Valve for $1,000, terms 2/10, n/30.
5 Purchased merchandise on account from Leon’s Garage for $1,400, terms 1/10, n/30.
11 Paid the amount due to Alanon Valve for the purchase on April 2.
25 Paid the amount due to Leon’s Garage for the purchase on April 5.
- 1. Prepare general
journal entries for these transactions using the gross-price method. - 2. Prepare general journal entries for these transactions using the net-price method.
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Purchases Transactions—Gross-Price and Net-Price Methods
Romero's Heating and Cooling had the following transactions during April:
Apr. 2
Purchased merchandise on account from Alanon Valve for $860, terms 2/10, n/30.
5
Purchased merchandise on account from Leon’s Garage for $1,480, terms 1/10, n/30.
11
Paid the amount due to Alanon Valve for the purchase on April 2.
25
Paid the amount due to Leon's Garage for the purchase on April 5.
1. Prepare general journal entries for these transactions using the gross-price method.
Page:
DATE
ACCOUNT TITLE
DOC.NO.
POST.REF.
DEBIT
CREDIT
1
20--Apr. 2
fill in the blank 6c7f68fb1f84077_2
fill in the blank 6c7f68fb1f84077_3
1
2
fill in the blank 6c7f68fb1f84077_5
fill in the blank 6c7f68fb1f84077_6
2
3
Purchased merchandise
3
4
5
fill in the blank 6c7f68fb1f84077_8
fill in the blank 6c7f68fb1f84077_9
4
5
fill in the blank 6c7f68fb1f84077_11
fill in the blank…
Purchases Transactions
Barans Company purchased merchandise on account from a supplier for $9,200, terms 2/10, n/30. Barans Company returned $1,700
of the merchandise and received full credit.
a. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment?
b. What account is credited by Barans Company to record the return?
Merchandise Inventory
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(a) The return of merchandise reduces the original invoice amount to be paid. The discount is taken on the amount owed on
the merchandise after the return.
(b) Any discounts or returns are recorded directly by the buyer who reduces the balances of Accounts Payable and Merchandise
Inventory, using a debit memo based on the net cost of the merchandise.
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Purchases Transactions
Barans Company purchased merchandise on account from a supplier for $9,200, terms 2/10, n/30. Barans Company returmed $1,700 of the merchandise and received full credit.
a. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment?
b. What account is credited by Barans Company to record the returm?
Merchandise Inventory v
Chapter 11A Solutions
College Accounting, Chapters 1-27
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- Prepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.arrow_forwardPURCHASES JOURNAL Ann Benton, owner of Bentons Galleria, made the following purchases of merchandise on account during the month of October: REQUIRED 1. Record the transactions in the purchases journal. Total and rule the journal. 2. Post from the purchases journal to the general ledger and accounts payable ledger accounts. Use account numbers as shown in the chapter.arrow_forwardJOURNALIZING PURCHASES RETURNS AND ALLOWANCES AND POSTING TO GENERAL LEDGER AND ACCOUNTS PAYABLE LEDGER Using page 3 of a general journal and the following general ledger and accounts payable ledger accounts, journalize and post the following transactions: July 7Returned merchandise to Starcraft Industries, 700. 15Returned merchandise to XYZ, Inc., 450. 27Returned merchandise to Datamagic, 900.arrow_forward
- C. R. McIntyre Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: Required 1. Journalize the transactions for May in the cash receipts journal and the sales journal. Assume the periodic inventory method is used. 2. Total and rule the journals. 3. Prove the equality of the debit and credit totals.arrow_forwardJOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY SYSTEM Sunita Computer Supplies entered into the following transactions. Prepare journal entries under the perpetual inventory system. May 1 Purchased merchandise on account from Anju Enterprises, 200,000. 8 Purchased merchandise for cash, 100,000. 15 Sold merchandise on account to Salils Pharmacy for 8,000. The merchandise cost 5,000.arrow_forwardPURCHASES JOURNAL J. B. Speck, owner of Specks Galleria, made the following purchases of merchandise on account during the month of September: Sept. 3Purchase Invoice No. 415, 2,650, from Smith Distributors. 8Purchase Invoice No. 132, 3,830, from Michaels Wholesaler. 11Purchase Invoice No. 614, 3,140, from J. B. Sanders Co. 18Purchase Invoice No. 329, 2,250, from Bateman Jones, Inc. 23Purchase Invoice No. 867, 4,160, from Smith Distributors. 27Purchase Invoice No. 744, 1,980, from Anderson Company. 30Purchase Invoice No. 652, 2,780, from Michaels Wholesaler. Required 1. Record the transactions in the purchases journal. Total and rule the journal. 2. Post from the purchases journal to the general ledger and accounts payable ledger accounts. Use account numbers as shown in the chapter.arrow_forward
- Purchase Discounts For each of the following transactions of Buckeye Corporation, prepare the appropriate journal entry. (All purchases on credit are made with terms of 1/10, n/30, and Buckeye uses the periodic system of inventory.) July 3: Purchased merchandise on credit from Wildcat Corp. for $3,500. July 12: Paid amount owed to Wildcat Corp.arrow_forwardPreston Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: Required 1. Journalize the transactions for May in the cash receipts journal and the sales journal. Assume the periodic inventory method is used. 2. Total and rule the journals. 3. Prove the equality of the debit and credit totals.arrow_forwardThe following transactions were completed by Nelsons Boutique, a retailer, during July. Terms of sales on account are 2/10, n/30, FOB shipping point. July 3Received cash from J. Smith in payment of June 29 invoice of 350, less cash discount. 6Issued Ck. No. 1718, 742.50, to Designer, Inc., for invoice. no. 2256, recorded previously for 750, less cash discount of 7.50. July 9Sold merchandise in the amount of 250 on a credit card. Sales tax on this sale is 6%. The credit card fee the bank deducted for this transaction is 5. 10Issued Ck. No. 1719, 764.40, to Smart Style, Inc., for invoice no. 1825, recorded previously on account for 780. A trade discount of 25% was applied at the time of purchase, and Smart Style, Inc.s credit terms are 2/10, n/30. 12Received 180 cash in payment of June 20 invoice from R. Matthews. No cash discount applied. 18Received 1,575 cash in payment of a 1,500 note receivable and interest of 75. 21Voided Ck. No. 1720 due to error. 25Received and paid utility bill, 152; Ck. No. 1721, payable to City Utilities Company. 31Paid wages recorded previously for the month, 2,586, Ck. No. 1722. Required 1. Journalize the transactions for July in the cash receipts journal, the general journal (for the transaction on July 9th), or the cash payments journal as appropriate. Assume the periodic inventory method is used. 2. If you are using Working Papers, total and rule the journals. Prove the equality of debit and credit totals.arrow_forward
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