Question

This information relates to Pharoah Co..

Answer 1

Answer and Explanation:

The journal entries are shown below:

On April 5

Inventory Dr $28,600.00  

     To Accounts payable  $28,600.00

(Being purchase of inventory on account is recorded)

On April 6  

Inventory Dr $580.00  

      To Cash  $580.00

(Being freight payment is recorded)  

On April 7

Equipment Dr $32,000.00  

      To Accounts payable  $32,000.00

(Being purchase of equipment is recorded)  

On April 8

Accounts payable Dr $3,500.00  

      To Inventory  $3,500.00

(Being purchase returns is recorded)  

On April 15

Accounts payable Dr $25,100.00 ($28,600- $3,500)  

      To Cash  $24,096.00

      To Inventory  $1,004.00 ($25,100 × 4%)

(Being payment to the supplier is recorded)