Question

P4-5 Sales and purchase-related transactions for seller and buyer The following selected transactions were completed during June between Snipes Company and Beejoy Company:
June 8. Snipes Company sold merchandise on account to Beejoy Company, $18,250, terms FOB destination, 2/15, n/eom. The cost of the merchandise sold Was $10,000.

8. Snipes Company paid transportation costs of $400 for delivery of merchandise sold to Beejoy Company on. June 8.

12. Beejoy Company returned $5,000 of merchandise purchased on account on June 8 from Snipes Company. The cost of the merchandise returned was $3,000. 23. Beejoy Company paid Snipes Company for purchase of June 8, less discount and less return of June 12.

24. Snipes Company sold merchandise on account to Beejoy Company, $15,000, terms FOB shipping point, n/eom. The cost of the merchandise sold was $9,000. 26. Beejoy Company paid transportation charges of $375 on June 24 purchase from Snipes Company.

30. Beejoy Company paid Snipes Company on account for purchase of June 24.

how would this l be done if it was put in a framework?

Answer 1

Answer:

SNIPES BOOKS

June 8th

Accounts Receivables 18,250 debit

            Sales revenue             18,250 credit

COGS          10,400 debit

          cash                                     400 credit

          merchandise inventory   10,000 credit

Sales returns    5,000  debit

    Accounts Receivables    5,000 credit

Merchandise Inventory  3,000 debit

       COGS                                3,000 credit

Cash                          12,985 debit

Sales Discount              265 debit

Account Receivables               13,250 credit            

Explanation:

Snipes will pay the freight as the term are FOB destination, which means the goods are still theirs until they arrive. Therefore it must take all thecost of transportation.

Balance of Beejoy account regarding Snipes company

Purchase - returned goods = balance at payment

18,250 - 5,000 = 13,250

13,250 x 2% = 265

net amount due: 12,985