Question

The following selected transactions were completed during August between Summit Company and Beartooth Co. Both companies use the net method under a perpetual inventory system.

Aug.	1	Summit Company sold merchandise on account to Beartooth Co., $52,150, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $25,940.
	2	Summit Company paid freight of $1,235 for delivery of merchandise sold to Beartooth Co. on August 1.
	5	Summit Company sold merchandise on account to Beartooth Co., $60,090, terms FOB shipping point, n/eom. The cost of the goods sold was $36,900.
	9	Beartooth Co. paid freight of $2,140 on August 5 purchase from Summit Company.
	15	Summit Company sold merchandise on account to Beartooth Co., $62,600, terms FOB shipping point, n/45. Summit paid freight of $1,515, which was added to the invoice. The cost of the goods sold was $32,600.
	16	Beartooth Co. paid Summit Company for purchase of August 1.
	20	Summit Company paid Beartooth Co. a cash refund of $1,000 for defective merchandise purchased on August 1. Beartooth Co. kept the merchandise.
	31	Beartooth Co. paid Summit Company on account for purchase of August 5.
	31	Summit Company issued Beartooth Co. a credit memo for merchandise with an invoice amount of $3,800 that was returned from the August 15 sale. The cost of the merchandise returned was $2,200. Can someone help me with the journal for summit company and the journal for beartooth co?

Answer 1

Summit:

Date	Account title and Explanation	Debit	Credit
Aug.1	Accounts receivable-Beartooth Co.	$52,150
	Sales revenue		$52,150
	[To record credit sales]
	Cost of goods sold	$25,940
	Inventory		$25,940
	[To record cost of goods sold]
Aug.2	Delivery expense	$1,235
	Cash		$1,235
	[To record payment of freight]
Aug.5	Accounts receivable-Beartooth Co.	$60,090
	Sales revenue		$60,090
	[To record credit sales]
	Cost of goods sold	$36,900
	Inventory		$36,900
	[To record cost of goods sold]
Aug.9	No entry
Aug.15	Accounts receivable-Beartooth Co. [62600+1515 freight]	$64,115
	Sales revenue		$62,600
	Cash		$1,515
	[To record credit sales and payment of freight on behalf of Beartooth]]
	Cost of goods sold	$32,600
	Inventory		$32,600
	[To record cost of goods sold]
Aug.16	Cash	$51,107
	Sales discount [52150 x 2%]	$1,043
	Accounts receivable-Beartooth Co.		$52,150
	[To record collections from customers]
Aug.20	Sales returns and allowance	$1,000
	Cash		$1,000
	[To record refund given for defective merchandise]
Aug.31	Cash	$60,900
	Accounts receivable-Beartooth Co.		$60,900
	[To record collections from customers]
Aug.31	Sales returns and allowance	$3,800
	Accounts receivable-Beartooth Co.		$3,800
	[To record sales returns]
	Inventory	$2,200
	Cost of goods sold		$2,200
	[To record cost of sales returns]

Beartooth:

Date	Account title and Explanation	Debit	Credit
Aug.1	Inventory	$52,150
	Accounts payable-Summit Co.		$52,150
	[To record purchase of inventory on account]
Aug.2	No Entry
Aug.5	Inventory	$60,090
	Accounts payable-Summit Co.		$60,090
	[To record purchase of inventory on account]
Aug.9	Inventory	$2,140
	Cash		$2,140
	[To record payment of freight]
Aug.15	Inventory [62600+1515]	$64,115
	Accounts payable-Summit Co.		$64,115
	[To record purchase of inventory on account]
Aug.16	Accounts payable-Summit Co.	$52,150
	Inventory [52150 x 2%]		$1,043
	Cash		$51,107
	[To record cash paid for accounts payable]
Aug.20	Cash	$1,000
	Inventory		$1,000
	[To record refund from seller for defective merchandise]
Aug.31	Accounts payable-Summit Co.	$60,090
	Cash		$60,090
	[To record cash paid for accounts payable]
Aug.31	Accounts payable-Summit Co.	$3,800
	Inventory		$3,800
	[To record purchase returns]