Chapter 5: Q5-26RQ (page 294)
When recording purchase returns and purchase allowances under the periodic inventory system, what account is used?
The purchase return and allowance account is credited when using aperiodic inventory system.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Journalize the following transactions that occurred in January 2018 for Sylvia’s Amusements. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Sylvia estimates sales returns at the end of each month.
Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, \(7,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of \)100 on January 4 purchase.
8 Returned half the inventory purchased on January 4 from Vanderbilt Company.
10 Sold merchandise inventory for cash, \(1,600. Cost of goods, \)640. FOB destination.
11 Sold merchandise inventory to Graceland Corporation, \(10,800, on account, terms of 1/10, n/EOM. Cost of goods, \)5,400. FOB shipping point.
12 Paid freight bill of \(60 on January 10 sale.
13 Sold merchandise inventory to Cabbell Company, \)9,500, on account, terms of n/45. Cost of goods, \(5,225. FOB shipping point.
14 Paid the amount owed on account from January 4, less return and discount.
17 Received defective inventory as a sales return from the January 13 sale, \)600. Cost of goods, \(300.
18 Purchased inventory of \)4,600 on account from Roberts Corporation. Payment terms were 3/10, n/30, FOB destination.
20 Received cash from Graceland Corporation, less discount.
26 Paid amount owed on account from January 18, less discount.
28 Received cash from Cabbell Company, less return.
29 Purchased inventory from Sandra Corporation for cash, \(11,600, FOB shipping point. Freight in paid to shipping company, \)240.
Journalize the following sales transactions for Austin Mall. Assume Austin Mall uses the gross method to record sales revenue. Explanations are not required.
Jan. 4 Sold \(10,000 of antiques on account, credit terms are 1/15, n/30. Cost of goods is \)5,000.
20 Austin Mall received payment from the customer on the amount due from Jan. 4.
20 Sold \(5,200 of antiques on account, credit terms are 1/10, n/45, FOB destination. Cost of goods is \)2,600.
20 Austin Mall paid $120 on freight out.
29 Received payment from the customer on the amount due from Jan. 20, less the discount.
Journalize the following transactions that occurred in March 2018 for Double Company. Assume Double uses the periodic inventory system. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Double estimates sales returns at the end of each month.
Mar. 3 Purchased merchandise inventory on account from Sidecki Wholesalers, \(5,500. Terms 2/15, n/EOM, FOB shipping point.
4 Paid freight bill of \)70 on March 3 purchase.
4 Purchased merchandise inventory for cash of \(1,100.
6 Returned \)900 of inventory from March 3 purchase.
8 Sold merchandise inventory to Herrick Company, \(3,400, on account. Terms 1/15, n/35.
9 Purchased merchandise inventory on account from Tex Wholesalers, \)5,600. Terms 2/10, n/30, FOB destination.
10 Made payment to Sidecki Wholesalers for goods purchased on March 3, less return and discount.
12 Received payment from Herrick Company, less discount.
13 After negotiations, received a \(500 allowance from Tex Wholesalers.
15 Sold merchandise inventory to Jesper Company, \)1,700, on account. Terms n/EOM.
22 Made payment, less allowance, to Tex Wholesalers for goods purchased on March 9.
23 Jesper Company returned \(300 of the merchandise sold on March 15.
25 Sold merchandise inventory to Salter for \)1,000 on account. Terms of 1/10, n/30 was offered, FOB shipping point.
29 Received payment from Salter, less discount.
30 Received payment from Jesper Company, less return.
Highlight the differences in the closing process when using the periodic inventory system rather than the perpetual inventory system.
Click Computers has the following transactions in July related to the purchase of merchandise inventory.
July 1 Purchase of \(20,500 worth of computers on account, terms of 2/10, n/30.
3 Return of \)4,000 of the computers to the vendor.
9 Payment made on the account.
Journalize the purchase transactions for Click Computers assuming the company uses the perpetual inventory system.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
