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, $17,700, terms FOB shipping point, 2/10, n/30. Swan Company paid freight of $420, which was added to the invoice. The cost of the merchandise sold was $11,200.
8.	Swan Company sold merchandise on account to Bird Company, $27,000, terms FOB destination, 1/15, n/30. The cost of the merchandise sold was $16,200.
8.	Swan Company paid freight of $840 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, $8,900, terms FOB shipping point, n/45. The cost of the merchandise sold was $5,300.
26.	Bird Company paid freight of $370 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).

Date	Account	Debit	Credit
Apr. 2	Merchandise Inventory
	Accounts Payable-Swan Company

Date	Account	Debit	Credit
Apr. 8	Merchandise Inventory
	Cash

Date	Account	Debit	Credit
Apr. 12

Date	Account	Debit	Credit
Apr. 18

Date	Account	Debit	Credit
Apr. 23

Date	Account	Debit	Credit
Apr. 24

Date	Account	Debit	Credit
Apr. 26

Date	Account	Debit	Credit
Apr. 30

2. Journalize the April transactions for Swan Company (the seller).

Date	Account	Debit	Credit
Apr. 2-sale

Date	Account	Debit	Credit
Apr. 2-freight

Date	Account	Debit	Credit
Apr. 2-cost

Date	Account	Debit	Credit
Apr. 8-sale

Date	Account	Debit	Credit
Apr. 8-cost

Date	Account	Debit	Credit
Apr. 8-freight

Date	Account	Debit	Credit
Apr. 12

Date	Account	Debit	Credit
Apr. 18

Date	Account	Debit	Credit
Apr. 23

Date	Account	Debit	Credit
Apr. 24-sale

Date	Account	Debit	Credit
Apr. 24-cost

Date	Account	Debit	Credit
Apr. 30

Date	Account	Debit	Credit
Apr. 30

Answer 1

Bird Company (Buyer)

Date	Account Titles	Debit	Credit
Apr-02	Merchandise Inventory	$          18,120
	Accounts Payable		$             18,120
Apr-08	Merchandise Inventory	$          27,000
	Accounts Payable		$             27,000
Apr-08	No entry
Apr-12	Accounts Payable	$          18,120
	Cash		$             17,766
	Merchandise Inventory		$                  354
Apr-18	Cash	$             2,000
	Merchandise Inventory		$               2,000
Apr-23	Accounts Payable	$          27,000
	Cash		$             26,730
	Merchandise Inventory		$                  270
Apr-24	Merchandise Inventory	$             8,900
	Accounts Payable		$               8,900
Apr-26	Merchandise Inventory	$                370
	Cash		$                  370
Apr-30	Accounts Payable	$          11,300
	Merchandise Inventory		$             11,300

Swan Company (Seller)

Date	Account Titles	Debit	Credit
Apr-02	Accounts Receivable	$          18,120
	Sales Revenue		$             17,700
	Cash		$                  420
	Cost of Goods Sold	$          11,200
	Merchandise Inventory		$             11,200
Apr-08	Accounts Receivable	$          27,000
	Sales Revenue		$             27,000
	Cost of Goods Sold	$          16,200
	Merchandise Inventory		$             16,200
Apr-08	Delivery Expense	$                840
	Cash		$                  840
Apr-12	Cash	$          17,766
	Sales Discounts	$                354
	Accounts Receivable		$             18,120
Apr-18	Sales Returns and allowances	$             2,000
	Cash		$               2,000
Apr-23	Cash	$          26,730
	Sales Discounts	$                270
	Accounts Receivable		$             27,000
Apr-24	Accounts Receivable	$             8,900
	Sales Revenue		$               8,900
	Cost of Goods Sold	$             5,300
	Merchandise Inventory		$               5,300
Apr-26	No entry
Apr-30	Sales Returns and allowances	$          11,300
	Accounts Receivable		$             11,300
	Merchandise Inventory	$             6,500
	Cost of Goods Sold		$               6,500