Question

Instru Deter E5-1 ord purchase and sales usactions-perpetual em. (1.01,23) AP Instructions (a) Prepare the journal entries to record the above transactions for Olaf Company. (b) Prepare the journal entries to record the above transactions for DeVito Company. (c) Calculate the gross profit earned by DeVito on these transactions. 5.3-6 The following merchandise transactions occurred in December. Both companies use a perpetual inve system. Dec. 3 Pippen Company sold merchandise to Thomas Co, for $32,000, terms 2/10, n/30, FOB destination merchandise cost Pippen Company $18,000. 4 The correct company paid freight charges of $650. 8 Thomas Co. returned unwanted merchandise to Pippen. The returned merchandise had a sales prices $1,800 and a cost of $990. It was restored to inventory. 13 Pippen Company received the balance due from Thomas Co. Instructions Client (a) Prepare the journal entries to record these transactions on the books of Pippen Company. ((b) Prepare the journal entries to record these transactions on the books of Thomas Co. (C) Assuming that Thomas Co, had a balance in Merchandise Inventory on December 1 of $6,000, determine the balance in the Merchandise Inventory account at the end of December for Thomas Co. E5-7 The following transactions were recorded by an inexperienced bookkeeper during the months of June u July for Jilly Bean Company, Jilly Bean Company uses a perpetual inventory system. June 10 A purchase of $4,000 of merchandise from Dan Dan Distributors was debited to Purchases and credi to Cash. The terms of the purchase were 2/10, n/30, FOB shipping point. 11 The invoice for freight in the amount of 5225 for the delivery of merchandise purchased from Dan was paid and was debited to Delivery Expense 12 Damaged goods totalling $200 were returned to Dan Dan Distributors for credit. The booklet d correct inventory actions-perpetual n. (LO 2, 3) AN

Answer 1

Refer the below images for the above mentioned questions, in a detailed way of solution.

solution : a) prepare on the the journal books of these transactions entries poppen to record company Date particulars Debit credit DOC 3. ale Accounts To or & 32.000 Receivable Sales 32000 Cost of Goods sold ale or Te Merchandise inventory $8000 $18000 ale or B650 freight out To cash 1650 Sales $ 1800 Retorns is allowances Alcor To Accounts Receivable $ 1800 $990 Merchandise inventory Alc or o cost of Goods Sold 6990 13 - $29596 & 604 cash Ale ($382004984-) Dr Sales Discount ($30 20072-t) Alc or To Accounts Receitable ($32000 & 1800) $30200

b) prepare the the books journal of entries Thomas to Co. record these transactions on Date Debit credit хс 3 particulars Merchandise inventory Alcor To Accoonts payable 72 000 $32000 No entry required Accounts $1800 payable AC DY Merchandise inventory To $ 1800 $ 30200 Accounts $604 payable All or Po Merchandise inventory (13820042-1-) To cash $29596 c) Assoming that thomas co on December of $ 6000. accoont at the end of had a balance in Merchandise inventory Determine balance in Merchandise inventory December for Thomas Co. Beginning inventory & 6000 & purchased inventory (De (3) $32000 - Returns (Dec 8) & (1800) - Discount on inventory & (604) (paid within month) Ending Inventory for Thomas $35596