Question

On May 15, Monique Company purchased $40,000 of merchandise from the Terrell Company, with terms of 1/10, n/30. On May 17, Monique paid $310 to Swift Trucking Company for freight on the shipment. On May 20, Monique Company returned $800 of merchandise for credit. Final payment was made to Terrell on May 24. Monique Company records purchases using the perpetual inventory system.
Required: Prepare the journal entries that Monique Company should make on May 15, 17, 20, and 24.

Answer 1

Answer:

May-15. Dr Merchandise inventory  40000

           Cr  Accounts payable         40000

   ( To record purchase of inventory)

May-17. Dr Merchandise inventory    310

                             Cash                             310

      (To record payment of freight of shipment)

May-20. Dr Accounts payable  800

                         Cr Merchandise inventory    800

      ( To record purchase return of inventory)

May-24. Dr Accounts payable  (40000-800)   39200

                         Cr Cash                                                  39200

      ( To record payment in full of inventory purchase)