Question

Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System The following selected transactions were completed during August between Summit Company and Beartooth Co.: Aug. 1. Summit Company sold merchandise on account to Beartooth Co., $49,750, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $26,490. 2. Summit Company paid freight of $1,240 for delivery of merchandise sold to Beartooth Co. on August 1. 5. Summit Company sold merchandise on account to Beartooth Co., $69,400, terms FOB shipping point, n/eom. The cost of the goods sold was $40,020. 9. Beartooth Co. paid freight of $2,260 on August 5 purchase from Summit Company. 15. Summit Company sold merchandise on account to Beartooth Co., $59,500, terms FOB shipping point, 1/10, n/30. Summit paid freight of $1,725, which was added to the invoice. The cost of the goods sold was $35,480. 16. Beartooth Co. paid Summit Company for purchase of August 1. 25. Beartooth Co. paid Summit Company on account for purchase of August 15. 31. Beartooth Co. paid Summit Company on account for purchase of August 5.

Answer 1

1)	Beartooth co .(the buyer)
	Date	Account				Debit	Credit
	1-Aug	Merchandise inventory				48,755
		Accounts payable -summit					48,755
	5-Aug	Merchandise inventory				69,400
		Accounts payable -summit					69,400
	9-Aug	Merchandise inventory				2,260
		cash					2,260
	15-Aug	Merchandise inventory				60630
		Accounts payable -summit					60,630
	16-Aug	Accounts payable -summit				48,755
		cash					48,755
	25-Aug	Accounts payable -summit				60630
		cash					60630
	31-Aug	Accounts payable -summit				69,400
		cash					69,400
2)	Summit company(The seller)
	Date	Account				Debit	Credit
	1-Aug	Accounts receivable-Beartooth				48,755
		Sales					48,755
	1-Aug	Cost of goods sold				26,490
		Merchandise inventory					26,490
	2-Aug	Delivery expense				1,240
		cash					1,240
	5-Aug	Accounts receivable-Beartooth				69,400
		Sales					69,400
		Cost of goods sold				40020
		Merchandise inventory					40,020
	15-Aug	Accounts receivable-Beartooth				58905
		Sales					58,905
		Accounts receivable-Beartooth				1,725
		Sales					1,725
		Cost of goods sold				35480
		Merchandise inventory					35,480
	16-Aug	cash				48,755
		accounts receivable-beartooth company					48,755
	25-Aug	cash				60,630
		accounts receivable-beartooth company					60,630
	31-Aug	cash				69,400
		accounts receivable-beartooth company					69,400