Question

Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System

The following selected transactions were completed during April between Swan Company and Bird Company:

Apr.2.	Swan Company sold merchandise on account to Bird Company, $32,000, terms FOB shipping point, 2/10, n/30. Swan Company paid freight of $330, which was added to the invoice. The cost of the merchandise sold was $19,200.
8.	Swan Company sold merchandise on account to Bird Company, $49,500, terms FOB destination, 1/15, n/30. The cost of the merchandise sold was $29,700.
8.	Swan Company paid freight of $710 for delivery of merchandise sold to Bird Company on April 8.
12.	Bird Company paid Swan Company for purchase of April 2.
18.	Swan Company paid Bird Company a refund of $2,000 for defective merchandise in the April 2 purchase. Bird Company agreed to keep the merchandise.
23.	Bird Company paid Swan Company for purchase of April 8.
24.	Swan Company sold merchandise on account to Bird Company, $67,350, terms FOB shipping point, n/45. The cost of the merchandise sold was $40,400.
26.	Bird Company paid freight of $875 on April 24 purchase from Swan Company.
30.	Swan Company granted a customer allowance (credit memo) to Bird Company for $11,300 for merchandise that was returned from the August 24 purchase. The cost of the merchandise returned was $6,500. Required: 1. Journalize the April transactions for Bird Company (the buyer).

Answer 1

Please find below the spreadsheet useful to compute desired results: -

Credit Debit $32.330.00 $32,330.00 $49,500.00 $49,500.00 $32.330.00 $31,690.00 $ 640.00 11 12 $ 2.000.00 А B Journal Entry 2 Date Particulars 3 02-Apr Inventory Accounts Payable - Swan Company (record the purchases) 6 08-Apr Inventory Accounts Payable - Swan Company (record the purchases) 12-Apr Accounts Payable - Swan Company Cash Inventory (record the cash paid) 18-Apr Cash Inventory (record the cash received for defective inventory) 23-Apr Accounts Payable - Swan Company 17 Cash Inventory (record the cash paid) 24-Apr Inventory | Accounts Payable - Swan Company (record the purchases) 26-Apr Inventory Cash (record the freight paid) 30-Apr Accounts Payable - Swan Company Merchandise Inventory (record the purcahse return) $ 2.000.00 $49,500.00 $49.005.00 S 495.00 $67,350.00 $67,350.00 S 875.00 S 875.00 $11,300.00 $ 11,300.00

Working notes: -

Credit Debit =32000+330 =C3 4. 5 32330 А B Journal Entry 2 Date Particulars 3 02nd April Inventory Accounts Payable - Swan Company (record the purchases) 9 12th April Accounts Payable - Swan Company 10 Cash 11 Inventory 12 (record the cash paid) 23rd April Accounts Payable - Swan Company Cash Inventory 19 (record the cash paid) =C9-D11 =32000*0.02 16 49500 =C16-D18 =49500*0.01 18