Question

On June 10, Crane Company purchased $10,000 of merchandise on account from Blue Company, FOB shipping point, terms 2/10, n/30. Crane pays the freight costs of $610 on June 11. Damaged goods totaling $350 are returned to Blue for credit on June 12. The fair value of these goods is $75. On June 19, Crane pays Blue Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Exercise 5-04 a-b (Part Level Submission) (Video) On June 10, Crane Company purchased $10,000 of merchandise on account from Blue Company, FOB shipping point, terms 2/10, n/30. Crane pays the freight costs of $610 on June 11. Damaged goods totaling $350 are returned to Blue for credit on June 12. The fair value of these goods is $75. On June 19, Crane pays Blue Company in full, less the purchase discount. Both companies use a perpetual inventory system. (a) Prepare separate entries for each transaction on the books of Crane Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Answer 1

Answer
Date	Account Titles and Explanation	Debit	Credit
Jun-10	Merchandise inventory	$   10,000
	Accounts Payable		$   10,000
Jun-11	Merchandise inventory	$        610
	Cash		$        610
Jun-12	Accounts Payable	$        350
	Merchandise inventory		$        350
Jun-19	Accounts Payable	$     9,650
	Merchandise inventory 9650*2%		$        193
	Cash		$     9,457