Question

CALCULATOR PRINTER VERSION BACK NEXT This information relates to Teal Mountain Co. 1. 2. 3. 4. 5. On April 5, purchased merchandise from Sandhill Company for $25,100, terms 2/10, 1/30. On April 6, paid freight costs of $640 on merchandise purchased from Sandhill. On April 7, purchased equipment on account for $32,900. On April 8, returned $4,800 of April 5 merchandise to Sandhill Company. On April 15, paid the amount due to Sandhill Company in full. (a) Prepare the journal entries to record the transactions listed above on Teal Mountain Co.'s books. Teal Mountain Co. uses a perpetual Inventory system. Ir no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically Indented when amount is entered. Do not Indent manually.) Account Tities and Explanation Debit Credit No. 1. Date April 5 Version 4.24 16 In all Dinhts Reserved. A Division of John Wiley & Sons Inc.

Answer 1

a)

Date	Account tilte	debit	credit
April5	Merchandise inventory	25100
	Accounts payable		25100
April 6	Merchandise inventory	640
	cash		640
April 7	Equipment	32900
	Accounts payable		32900
April 8	Accounts payable	4800
	Merchandise inventory		4800
April 15	Accounts payable [25100-4800]	20300
	Merchandise inventory [20300*2%]		406
	cash		19894

On April 15,payment is made within discount period of 10days (5April +10days) so discount of 2% is available .

b)

Date	Account title	Debit	credit
May 4	Accounts payable [25100-4800]	20300
	cash		20300