Question

This information relates to Cullumber Co..1.On April 5, purchased merchandise from Oriole Company for $27,900, terms 2/10, n/30.2.On April 6, paid freight costs of $670 on merchandise purchased from Oriole Company.3.On April 7, purchased equipment on account for $31,600.4.On April 8, returned $3,700 of April 5 merchandise to Oriole Company.5.On April 15, paid the amount due to Oriole Company in full.(a)Prepare the journal entries to record the transactions listed above on Cullumber Co.’s books. Cullumber Co. uses a perpetual 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.)

Answer 1

Answer:

Explanation:

The journal entries are shown below:

On April 5

Merchandise Inventory A/c $27,900

         To Accounts payable A/c  $27,900

(Being merchandise purchased on credit)

On April 6

Merchandise inventory A/c Dr $670

       To Cash A/c $670

(Being freight is paid by cash)

On April 7

Equipment A/c Dr $31,600

     To  Accounts payable A/c  $31,600

(Being equipment is purchased on credit)

On April 8

Accounts payable A/c  $3,700

   To Merchandise inventory A/c Dr $3,700

(Being the returned goods is recorded)

On April 15

Accounts payable A/c Dr $24,200           ($27,900  - $3,700)

     To Cash A/c   $23,716                   

     To Merchandise Inventory A/c $484                      ($24,200 × 2%)

(Being due amount is paid and the remaining balance is credited to the cash account)