Question

Bart Corporation, which began business on August 1 of the current year, sells on terms of 2/10, n/30, F.O.B. shipping point. Credit terms and freight terms for its purchases vary with the supplier. Selected transactions for August are given below. Unless noted, all transactions are on account and involve merchandise held for resale. All purchases are recorded at invoice price.

August

1 Purchased merchandise from Sally, Inc., $750, terms 2/10, n/30, F.O.B. shipping point, freight collect.
4 Purchased merchandise from Neelam Company, $1,400, terms 2/10, n/30, F.O.B. destination. Freight charges of $60 were prepaid by Neelam Company.
5 Paid freight on shipment from Sally, Inc., $60.
6 Sold merchandise to Solid Corporation, $800.
7 Paid freight on shipment to Solid Corporation, $45, and billed Solid for the charges.
8 Returned $50 worth of the merchandise purchased August 1 from Sally, Inc., because it was defective.
9 Issued a credit memo to Solid Corporation for $100 worth of merchandise returned by Solid.
10 Paid Sally, Inc. the amount due.
14 Purchased from Delgado, Inc., goods with a list price of $1,600. Bart Corporation was entitled to a 25% trade discount; terms 1/10, n/30, F.O.B. shipping point, freight collect.
15 Paid freight on shipment from Delgado, Inc., $60.
17 Received the amount due from Solid Corporation.
18 Sold merchandise to Watson, Inc., $2,200.
19 Paid Neelam Company for the amount due on its August 4 invoice.
20 Paid freight on August 18 shipment to Watson, Inc., $70.
20 Received a credit memo of $200 from Delgado, Inc., adjusting the price charged for merchandise purchased on August 14.
25 Paid Delgado, Inc., the amount due.
28 Received the amount due from Watson, Inc.

REQUIRED

Record the transactions for Bart Corporation in general journal form.

Answer 1

Date	Account Titles	Debit	Credit
Aug-01	Inventory	$                      750
	Accounts Payable		$                        750
	(Purchase of Inventory on account)
Aug-04	Inventory	$                   1,400
	Accounts Payable		$                    1,400
	(Purchase of Inventory on account)
Aug-05	Inventory	$                         60
	Cash		$                          60
	(Paid freight on purchase from Sally Inc)
Aug-06	Accounts Receivable	$                      800
	Sales Revenue		$                        800
	(Sales on account)
Aug-07	Delivery Expense	$                         45
	Cash		$                          45
	(Paid freight on sale to Solid Corp)
Aug-08	Accounts Payable	$                         50
	Inventory		$                          50
	(Returned merchandise to Sally)
Aug-09	Sales Return	$                      100
	Accounts Receivable		$                        100
	(Return by Solid Corporation)
Aug-10	Accounts Payable	$                      700		=(750-50)
	Inventory		$                          14	=(750-50)*2%
	Cash		$                        686	=(750-50)*98%
	(Paid cash to Sally after 2% discount)
Aug-14	Inventory	$                   1,200		=1600*75%
	Accounts Payable		$                    1,200
	(Purchase of Inventory on account)
Aug-15	Inventory	$                         60
	Cash		$                          60
	(Paid freight on purchase from Delgado)
Aug-17	Cash	$                      700
	Accounts Receivable		$                        700
	(Collection from Solid)
Aug-18	Accounts Receivable	$                   2,200
	Sales Revenue		$                    2,200
	(Sales on account)
Aug-19	Accounts Payable	$                   1,400
	Cash		$                    1,400
	(Paid cash to Neelam Co. After discount period)
Aug-20	Delivery Expense	$                         70
	Cash		$                          70
	(Paid freight on sale to Watson)
Aug-20	Accounts Payable	$                      200
	Inventory		$                        200
	(Credit note received)
Aug-25	Accounts Payable	$                   1,000
	Cash		$                    1,000
	(Paid cash to Delgado. After discount period)
Aug-28	Cash	$                   2,200
	Accounts Receivable		$                    2,200
	(Collection from Delgado)