Question

Flint Ltd. and Pina Colada Ltd. incurred the following merchandise transactions in June.

June	10		Flint sold $4,600 of merchandise to Pina Colada, terms 1/10, n/30, FOB shipping point. The merchandise cost Duvall $2,760 when it was originally purchased.
	11		Freight costs of $210 were paid by the appropriate company.
	12		Flint received damaged goods returned by Pina Colada for credit. The goods were originally sold for $300; the cost of the returned merchandise was $180. The merchandise was not returned to inventory.
	19		Flint received full payment from Pina Colada.

Prepare journal entries for each transaction in the books of Flint Ltd., assuming (1) a perpetual inventory system is used, and (2) a periodic inventory system is used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to the nearest whole dollar, e.g. 5,275.) (1) Perpetual Inventory System Debit Credit Date Account Titles and Explanation June Inventory 4600 10 Accounts Payable 4600 (To record credit sale) 10 (To record merchandise sold) 11 Freight Out 210 Cash 210

Answer 1

1)	Perpetual Inventory System
	Date	Account titles & Explanations					Debit	Credit
	10-Jun	Accounts receivable					4,600
		sales						4,600
	10-Jun	Cost of goods sold					2,760
		inventory						2,760
	11-Jun	No Entry
	12-Jun	Sales return and allowance					300
		Accounts receivable						300
		Inventory					180
		Cost of goods sold						180
	19-Jun	Cash					4257
		Sales discount					43
		Accounts receivable						4,300
2)	Periodic inventory system
	Date	Account titles & Explanations					Debit	Credit
	10-Jun	Accounts receivable					4,600
		sales						4,600
	11-Jun	No Entry
	12-Jun	Sales return and allowance					300
		Accounts receivable						300
	19-Jun	Cash					4257
		Sales discount					43
		Accounts receivable						4,300
	FOB shipping point means title to the goods passes from the seller to the buyer at the
	point of shipping hence freight costs will be paid by buyer