Q29E
Question
Lawrence Appliances had the following purchase transactions. Journalize all necessary transactions using the periodic inventory system. Explanations are not required.
Sep. 4 Purchased inventory of \(6,900 on account from Max Appliance Wholesale, an appliance wholesaler. Terms were 3/15, n/30, FOB shipping point.
4 Paid freight charges, \)480.
10 Returned \(300 of inventory to Max.
17 Paid Max Appliance Wholesale, less return, and discount.
20 Purchased inventory of \)3,900 from MY Appliance, an appliance wholesaler. Terms were 1/10, n/45, FOB destination.
22 Received a $400 allowance from MY Appliance for damaged but usable goods.
29 Paid MY Appliance, less allowance and discount.
Step-by-Step Solution
VerifiedThe total of debits and credits is $22,080.
In cost accounting, raw material denotes the goods required to be processed before selling them to the consumers. Raw materials pass through the production process and appear as finished goods.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
Sep 4 | Purchases | 6,900 |
|
| Accounts payable |
| 6,900 |
Sept 4 | Freight in | 480 |
|
| Cash |
| 480 |
Sep 10 | Accounts payable | 300 |
|
| Purchase returns |
| 300 |
Sep 17 | Accounts payable (6900-300) | 6,600 |
|
| Purchase discount (6600*3%) |
| 198 |
| Cash |
| 6402 |
Sep 20 | Purchases | 3,900 |
|
| Accounts payable |
| 3,900 |
Sep 22 | Accounts payable | 400 |
|
| Purchase allowance |
| 400 |
Sep 29 | Accounts payable (3900-400) | 3,500 |
|
| Purchase discount (3500*1%) |
| 35 |
| Cash |
| 3,465 |