Question

Shore Co. sold merchandise to Blue Star Co. on account, $110,600, terms FOB shipping point, 2/10, n/30. The cost of the goods sold is $66,360. Shore paid freight of $2,000. Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due, using the net method under a perpetual inventory system. If an amount box does not require an entry, leave it blank. Accounts Receivable-Blue Star Co. 108,388 Sales 108,388 Cost of Goods Sold 66,360 Inventory 66,360 Accounts Receivable-Blue Star Co. 2,000 Cash 2,000 Sales Returns and Allowances x Inventory X Feedback Check My Work Note who is the buyer and who is the seller. The payment is less returns and discounts, and discounts are not taken on returns. If applicable, determine whether the buyer or seller is to pay any freight Journalize Blue Star Co.'s entry for the sale, purchase, and payment of amount due, using the net method. If an amount box does not require an entry, leave it blank.

Answer 1

SOLUTION

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Accounts Receivable-Blue Star Co.	108,388
	Sales [110,600-(110,600*2%)]		108,388
	Cost of goods sold	66,360
	Inventory		66,360
	Accounts Receivable-Blue Star Co.	2,000
	Cash		2,000
	Cash	110,388
	Accounts Receivable-Blue Star Co.		110,388
	{[110,600-(110,600*2%)] + 2,000}
B.	Merchandise Inventory	110,388
	Accounts Payable-Shore Co.		110,388
	Accounts Payable-Shore Co.	110,388
	Cash		110,388