Question

during August of the cur. P4-1 Purchase-related transactions The following selected transactions were completed by Epic Co. during Augm unt) for merchandise shipping point, t/com. rent year: handise on account for $33,400, terms FOB destination 9. Issued debit memorandum for $2,500 ($2,450 net of 2% discount) for from the August 3 purchase that was damaged in shipment. 10. Purchased merchandise on account, $25,000, terms FOB shipping ne Paid $600 cash to the freight company for delivery of the merchandise 13. Paid for invoice of August 3, less debit memorandum of August 9. 31. Paid for invoice of August 10. Instructions Illustrate the effects of each of the preceding transactions on the accounts and financial statements of Epic Co. Identify each transaction by date. ............................................................................. ............................... ...... P4-2 Sales-related transactions The following selected transactions were completed by Affordable Supplies Co., which sells supplies primarily to wholesalers and occasionally to retail customers. Jan. 6. Sold merchandise on account, $14,000, terms FOB shipping point, n/eom. The cost of merchandise sold was $8,400. 8. Sold merchandise on account, $20,000, terms FOB destination, 1/10, 1/30. The cost of merchandise sold was $14,000. 16. Sold merchandise on account, $19,500, terms FOB shipping point, n/30. in of merchandise sold was $11,700. 18. Received check for amount due for sale on January 8. 19. Issued credit memorandum for $4,500 for merchandise returned from January 16, The cost of the merchandise returned was $2,700. 26. Received check for amount due for sale on January 16 less credit my redit memorandum of January 19. turned from sale on 31. Paid Cashell Delivery Service $3,000 for merchandise delivered during customers under shipping terms of FOB destination. 31. Received check for amount due for sale of January 6. Ivered during January to

Answer 1

Part 1:- Transaction

Date	transaction	Debit	Credit
Aug.3	inventory account	$33400
	To accounts payable		$33400
	(Purchased merchandise on account)
Aug.9	Account payable	$2500
	To inventory		$2500
	(Issued on memorandum for purchase)
Aug.10	inventory account	$25000
	To accounts payable		$25000
	(Purchased merchandise on account)
	Freight charges	$600
	To cash		$600
Aug.13	Accounts payable	$30900
	To inventory		$618
	To cash		$30282
	(Paid for the inventory purchase)
Aug.31	Accounts payable	$25000
	To cash		$25000
	(Paid cash for the inventory purchase)

Calculation for Aug.13:-

Purchase	$33400
Less returns	$(2500)
	$30900
Trade discount @2%	$618
Net cash to be payable	$30282