Question

On June 10, Crane Company purchased $9,000 of merchandise on account from Pronghorn Company, FOB shipping point, terms 2/10, n/30. Crane pays the freight costs of $550 on June 11. Damaged goods totaling $350 are returned to Pronghorn for credit on June 12. The fair value of these goods is $80. On June 19, Crane pays Pronghorn Company in full, less the purchase discount. Both companies use a perpetual inventory system. ----->>>>> QUESTION:: Prepare separate entries for each transaction for Pronghorn Company. The merchandise purchased by Crane on June 10 had cost Pronghorn $4,700. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Prepare separate entries for each transaction for Pronghorn Company. The merchandise purchased by Crane on June 10 had cost Pronghorn 54,700. (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 (To record credit sale) (To record cost of merchandise sold) (To record merchandise returned) (To record cost of merchandise returned) Date Account Title and Explanation Debit Credit Jun10 Inventory 9,000 Accounts Payable 9,000 (Purchase of Merchandise on account) Jun 11 Inventory 550 Cash 550 (Freight cost paid) Jun 12 Accounts Payable 350 Inventory 350 (Damaged goods returned) Jun 19 Accounts Payable ($9,000 - $350) 8,650 Cash [($9,000 - $350) * 98%] 8,477 Inventory [($9,000 - $350) * 2%] 173

----->>>>> QUESTION:: Prepare separate entries for each transaction for Pronghorn Company. The merchandise purchased by Crane on June 10 had cost Pronghorn $4,700. (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
June 10June 11June 12June 19
	(To record credit sale)
June 10June 11June 12June 19
	(To record cost of merchandise sold)
June 10June 11June 12June 19
	(To record merchandise returned)
June 10June 11June 12June 19
	(To record cost of merchandise returned)
June 10June 11June 12June 19

Answer 1

Journal entry in the book of Pronghorn Company
Date	Account Title	Debit	Credit
June 10	Accounts Receivable	$9,000
	Sales		$9,000
	(To record credit sale)
June 10	Cost of Good Sold	$4,700
	Merchandise Inventory		$4,700
	(To record cost of merchandise sold)
June 12	Sales	$350
	Accounts Receivable		$350
	(To record merchandise return)
June 12	Merchandise Inventory	$80
	Cost of Good Sold		$80
	(To record cost of merchandise returned)
June 19	Cash	$8,477
	Discount on sales [($9000-$350) x 2%]	$173
	Accounts Receivable		$8,650
"Credit term of 2/10, n/30" means that payment is be done in 30 days and if made within 10 days then 2% cash discount will be given.