Q31E
Question
Journalize the following transactions for Master Bicycles using the periodic inventory system. Explanations are not required.
Nov. 2 Purchased \(3,400 of merchandise inventory under terms 2/10, n/EOM, and FOB shipping point.
6 Returned \)800 of defective merchandise purchased on November 2.
8 Paid freight bill of \(100 on November 2 purchase.
10 Sold merchandise inventory on account for \)6,100. Payment terms were 3/15, n/45.
11 Paid amount owed on credit purchase of November 2, less the return and the discount.
22 Received cash from November 10 customer in full settlement of their debt, less the discount.
Step-by-Step Solution
VerifiedThe total of debits and credits is $19,100.
In accounting, merchandise inventory indicates the goods or products stocked/held by a business concern to resale and generate revenues. An inventory consists of various stages such as raw material, work-in-progress, and finished goods.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
Nov 2 | Purchases | 3,400 |
|
| Accounts payable |
| 3,400 |
Nov 6 | Accounts payable | 800 |
|
| Purchase returns |
| 800 |
Nov 8 | Freight-in | 100 |
|
| Cash |
| 100 |
Nov 10 | Accounts receivable | 6,100 |
|
| Sales |
| 6,100 |
Nov 11 | Accounts payable (3400-800) | 2,600 |
|
| Purchase discount (2600*2%) |
| 52 |
| Cash |
| 2,548 |
Nov 22 | Cash | 5,917 |
|
| Sales discount (6100*3%) | 183 |
|
| Accounts receivable |
| 6,100 |