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Information related to Pharoah Company is presented below.

a. On April 5, purchased merchandise on account from Riverbed Company for $28,800, terms 3/10, net/30, FOB shipping point.
b. On April 6, paid freight costs of $900 on merchandise purchased from Riverbed.
c. On April 7, purchased equipment on account for $29,000.
d. On April 8, returned $3,400 of merchandise to Riverbed Company.
e. On April 15, paid the amount due to Riverbed Company in full.

Required:
Prepare the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system.

Sagot :

abiolataiwo2015

Answer:

April 5

Dr Inventory $28,800

Cr Accounts Payable $28,800

April 6

Dr Inventory $900

Cr Cash $900

April 7

Dr Equipment $29,000

Cr Accounts Payable $29,000

April 8

Dr Accounts Payable $3,400

Cr Inventory credit $3,400

April 15

Dr Accounts Payable 25,400

Cr Cash 24,638

Cr Inventory 762

Explanation:

Preparation of the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system

April 5

Dr Inventory $28,800

Cr Accounts Payable $28,800

April 6

Dr Inventory $900

Cr Cash $900

April 7

Dr Equipment $29,000

Cr Accounts Payable $29,000

April 8

Dr Accounts Payable $3,400

Cr Inventory credit $3,400

April 15

Dr Accounts Payable 25,400

($28,800 - 3,400)

Cr Cash 24,638

(25,400-762)

Cr Inventory 762

(25400 * 0.03 )

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