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tensa zangetsu [6.8K]
2 years ago
8

On June 10, Pais Company purchased $9,000 of merchandise from McGiver Company, terms 3/10, n/30. Pais Company pays the freight c

osts of $400 on June 11. Goods totaling $600 are returned to McGiver Company for credit on June 12. On June 19, Pais Company pays McGiver Company in full, less the purchase discount. Both companies use a perpetual inventory system.
Prepare separate entries for each transaction on the books of Pais Company.
Business
1 answer:
elena-s [515]2 years ago
5 0

Answer:

A. Books of Pais Company

June 10

Dr Merchandise inventory $9,000

Cr Accounts payable $9,000

June 11

Dr Merchandise inventory $400

Cr Cash $400

June 12

Dr Accounts payable $600

Cr Merchandise inventory $600

On June 19

Dr Account payable 8,400

Cr Cash 8,148

Cr Merchandise inventory 252

B. Books of McGiver Company

June 10

Dr Accounts receivable $9,000

Cr Sales $9,000

Dr Cost of Goods Sold $5,000

Cr Merchandise inventory $5,000

On June 11

No entry

On June 12

Dr Sales returns & allowances $600

Cr Accounts receivable $600

Dr Merchandise inventory $310

Cr Cost of Goods Sold $310

On June 19

Dr Cash 8,148

Dr Sales discounts 252

Cr Accounts receivable 8,400

Explanation:

A. Preparation of the entries on the books of Pais Company.

June 10

Dr Merchandise inventory $9,000

Cr Accounts payable $9,000

June 11

Dr Merchandise inventory $400

Cr Cash $400

June 12

Dr Accounts payable $600

Cr Merchandise inventory $600

On June 19

Dr Account payable 8,400

($9,000 - $600)

Cr Cash 8,148

(8,400 x 97%)

Cr Merchandise inventory 252

(8,400 x 3%)

B. Preparation of the entries on the books of McGiver Company

June 10

Dr Accounts receivable $9,000

Cr Sales $9,000

Dr Cost of Goods Sold $5,000

Cr Merchandise inventory $5,000

On June 11

No entry is needed in McGiver Company books

On June 12

Dr Sales returns & allowances $600

Cr Accounts receivable$600

Dr Merchandise inventory$310

Cr Cost of Goods Sold$310

On June 19

Dr Cash 8,148

(8,400 x 97%)

Dr Sales discounts 252

(8,400 x 3%)

Cr Accounts receivable 8,400

(8,148+252)

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We can compute this using the Annual depreciation charge
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A beneficiary acquired stock from a decedent. The stock's fair market value at the date of the decedent's death was $500,000. Th
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