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., $45,300, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $26,780.
2.	Summit Company paid freight of $1,130 for delivery of merchandise sold to Beartooth Co. on August 1.
5.	Summit Company sold merchandise on account to Beartooth Co., $68,140, terms FOB shipping point, n/eom. The cost of the goods sold was $38,330.
9.	Beartooth Co. paid freight of $2,130 on August 5 purchase from Summit Company.
15.	Summit Company sold merchandise on account to Beartooth Co., $61,700, terms FOB shipping point, 1/10, n/30. Summit paid freight of $1,625, 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. Journal Entries Using the Periodic Inventory System The following selected transactions were completed by Air Systems Company during January of the current year. Air Systems uses the periodic inventory system. Jan. 2 Purchased $17,000 of merchandise on account, FOB shipping point, terms 1/15, n/30. Jan. 5 Paid freight of $250 on the January 2 purchase. Jan. 6 Returned $3,600 of the merchandise purchased on January 2. Jan. 13 Sold merchandise on account, $8,800, FOB destination, 2/10, n/30. The cost of goods sold was $6,400. Jan. 15 Paid freight of $200 for the merchandise sold on January 13. Jan. 17 Paid for the purchase of January 2 less the return and discount. Jan. 23 Received payment on account for the sale of January 13 less the discount. Journalize the entries to record the transactions of Air Systems Company. If an amount box does not require an entry, leave it blank. Jan. 2 Purchases Accounts Payable Jan. 5 Freight In Cash Jan. 6 Accounts Payable Purchases Returns and Allowances Jan. 13 Accounts Receivable Sales Jan. 15 Delivery Expense Cash Jan. 17 Accounts Payable Purchases Discounts Cash Jan. 23 Cash Accounts Receivable Journal Entries Using the Periodic Inventory System The following selected transactions were completed by Air Systems Company during January of the current year. Air Systems uses the periodic inventory system. Jan. 2 Purchased $17,000 of merchandise on account, FOB shipping point, terms 1/15, n/30. Jan. 5 Paid freight of $250 on the January 2 purchase. Jan. 6 Returned $3,600 of the merchandise purchased on January 2. Jan. 13 Sold merchandise on account, $8,800, FOB destination, 2/10, n/30. The cost of goods sold was $6,400. Jan. 15 Paid freight of $200 for the merchandise sold on January 13. Jan. 17 Paid for the purchase of January 2 less the return and discount. Jan. 23 Received payment on account for the sale of January 13 less the discount. Journalize the entries to record the transactions of Air Systems Company. If an amount box does not require an entry, leave it blank. Jan. 2 Purchases Accounts Payable Jan. 5 Freight In Cash Jan. 6 Accounts Payable Purchases Returns and Allowances Jan. 13 Accounts Receivable Sales Jan. 15 Delivery Expense Cash Jan. 17 Accounts Payable Purchases Discounts Cash Jan. 23 Cash Accounts Receivable

Answer 1

Summit Company and Beartooth Co.: Summit Company Journal Enteries Debit in $ Credit in $ Particulars Date Aug-01 Accounts Receivable-Beartooth Co. a/c Dr. 45300 To Sales 45300 (Sales on account) Cost of goods sold a/c 26780 Dr. To Inventory (To record cost of goods sold) 26780 Aug-02 Delivery Expense a/c Dr. 1130 To Cash 1130 (Freight paid) Aug-05 Accounts Receivable-Beartooth Co. a/c Dr. 68140 To Sales 68140 (Sales on account) Cost of goods sold a/c Dr. 38330 To Inventory 38330 (To record cost of goods sold) Aug-15 Accounts Receivable-Beartooth Co. a/c Dr. 61700 To Sales 61700 (Sales on account) Cost of goods sold a/c Dr. 35480 To Inventory 35480 (To record cost of goods sold) Accounts Receivable-Beartooth Co. a/c Dr. 1625 To Cash 1625 (Freight paid) Aug-16 Cash a/c Dr. 44394 Sales Discounts a/c 906 Dr. To Accounts Receivable-Beartooth Co. 45300 (Cash from debtors) Aug-25 Cash a/c Dr. 62692 Sales Discounts a/c 633 Dr. To Accounts Receivable-Beartooth Co. 63325 (Cash from debtors) Aug-31 Cash a/c Dr. 68140 To Accounts Receivable-Beartooth Co. 68140 (Cash from debtors)

Beartooth Co Journal Enteries Debit in $ Credit in $ Particulars Date Aug-01 Merchandise Inventory a/c 45300 Dr. To Accounts Payable-Summit Company 45300 Inventory on account) Merchandise Inventory a/c 68140 Aug-05 Dr. To Accounts Payable-Summit Company 68140 |(Inventory on account) Aug-09 Merchandise Inventory 213 Dr. To Cash 2130 (Freight paid) Merchandise Inventory a/c To Accounts Payable-Summit Company Aug-15 Dr. 63325 63325 Inventory on account) Aug-16 Accounts Payable-Summit Company a/c Dr. 45300 To Cash 44394 To Merchandise Inventory 906 (Creditors paid) Aug-25 Accounts Payable-Summit Company a/c Dr. 63325 To Cash 62692 To Merchandise Inventory 633 (Creditors paid) Aug-31 Accounts Payable-Summit Company a/c Dr 68140 To Cash 68140 (Creditors paid)

Air Systems Journal Enteries Debit in $ Credit in $ Particulars Date Jan-02 Purchases a/c 17000 Dr. To Accounts Payable 17000 (Purchase on credit) Freight In a/c Jan-05 Dr. 250 To Cash 250 (Freight paid) Accounts Payable a/c Dr. Jan-06 3600 To Purchases Returns and Allowances 3600 (Goods returned) Accounts Receivable a/c Dr. Jan-13 8800 To Sales 8800 (Sales on account) Delivery Expense a/c Jan-15 Dr. 200 To Cash 200 (Freight paid) Accounts Payable a/c Dr. 13400 Jan-17 To Cash 13266 To Purchase Discount 134 (Creditors paid) Cash a/c Jan-23 Dr. 8624 Sales Discounts a/c Dr. 176 To Accounts Receivable 8800 (Cash from debtors)