Question

Cornerstone Exercise 6-29 (Algorithmic) Recording Purchase Transactions (Appendix 6A) For Rigoletto Corp. and Villanuevo, Inc., the following transactions occurred during the month of April: a. On April 1, Rigoletto Corp. purchased merchandise on account from Villanuevo, Inc. with credit terms of 2/10, 1/30. The selling price of the merchandise was $3,900 and the cost of the merchandise sold was $2,450. b. On April 1, Rigoletto paid delivery charges of $100 cash to have the goods delivered to its store. c. On April 8, Rigoletto returned $1,000 of the merchandise which had originally cost Villanuevo $700, d. On April 10, Rigoletto paid Villanuevo the balance due. Assume that Rigoletto uses a periodic inventory system Required: 1. Prepare the journal entry to record the April 1 purchase of merchandise and payment of freight by Rigoletto Corp. Aprill April 1 — O (Purchased Inventory on account) Aprill (Paid cash for shipping fees) 2. Prepare the journal entry to record the April 8 return of merchandise April 8

Answer 1

Answer -

No.	Date	Account Titles and Explanation	Debit ($)	Credit ($)
1.	April 1	Purchases [Given in question] Accounts Payable (Purchased inventory on account)	3900 -	- 3900
	April 1	Delivery Expense Cash [Given in question] (Paid cash for shipping fees)	100 -	- 100
2.	April 8	Accounts Payable Purchase Returns and Allowances [Given in question] (Returned merchandise)	1000 -	- 1000
3.	April 10	Accounts Payable [$3900 - $1000] Purchase Discounts [$2900 * 2%] Cash [Difference] (Recorded payment within the discount period)	2900 - -	- 58 2842