Question

Journalize the following transactions for Wilson Company using the gross method of accounting for purchase discounts. Assume a perpetual inventory system.

January	9		Purchased goods from Thompson Company on account, $8,200, terms 5/10, n/30.
January	15		Returned merchandise to Thompson Company that was previously purchased on account, $820.
January	19		Paid the amount due to Thompson Company.

Answer 1

Credit Debit $ 8,200 Date Accounts tittle Jan-09 Merchandise inventory Accounts payable (To record purchase of inventory) $ 8,200 | $ 820 Jan-15 Accounts payable Merchandise inventory |(To record return of inventory) $ 820 $ 7,380 Jan-19 Accounts payable Cash Inventory (To record payment) $ $ 7,011 369 Less: working note-1 Accounts payable Purchase returns Net accounts Payables Discount at 5% (Payment made within 10 days; 5/10) $ $ $ $ 8,200 820 7,380 369 7380*5%