Question

Prepare the journal entries to record these transactions on Wildhorse Co.’s books using a periodic inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On March 2, Wildhorse Co. purchased $907,500 of merchandise from Sandhill Co., terms 2/10, n/30. (b) On March 6, Wildhorse Co. returned $115,700 of the merchandise purchased on March 2. (c) On March 12, Wildhorse Co. paid the balance due to Sandhill Co..

Answer 1

Answer:

(a) On March 2, Wildhorse Co. purchased $907,500 of merchandise from Sandhill Co., terms 2/10, n/30    

 

DB Inventory_____________ 907500  

CR Account payable_____________________________907500

 

(b) On March 6, Wildhorse Co. returned $115,700 of the merchandise purchased on March 2.  

 

DB Account payable_________ 115700  

CR Inventory________________________________ 115700

 

(c) On March 12, Wildhorse Co. paid the balance due to Sandhill Co.  

 

DB Account payable_________ 791800  

CR Inventory______________________________  15836

CR Cash___________________________________ 775964

Explanation:

(a) On March 2, Wildhorse Co. purchased $907,500 of merchandise from Sandhill Co., terms 2/10, n/30    

 

DB Inventory_____________ 907500  

CR Account payable_____________________________907500

 

(b) On March 6, Wildhorse Co. returned $115,700 of the merchandise purchased on March 2.  

 

DB Account payable_________ 115700  

CR Inventory________________________________ 115700

 

(c) On March 12, Wildhorse Co. paid the balance due to Sandhill Co.  

 

DB Account payable_________ 791800  

CR Inventory______________________________  15836

CR Cash___________________________________ 775964