Question

Journalize the following transactions for the buyer, Reed Company, using the gross method to account for purchase discounts. Assume a perpetual inventory system. Purchased merchandise from Green Company on account, $5,000, terms 4/10, n/30. The goods are shipped FOB shipping point, freight prepaid by seller, $230. November 3 November 9 Returned to Green Company merchandise previously purchased on account, $200. Paid the amount due to Green Company. November 14 Date Account Title Debit Credit * (Choose one) Accounts Payable Accounts Receivable Cash Cost of Goods Sold Purchase Discounts Lost Freight Out Merchandise Inventory Prepaid Rent Rent Expense Sales Sales Discounts Sales Returns and Allowances Supplies Supplies Expense

Answer 1

Answer
Date	Accounts title	Debit	Credit
03-Nov	Merchandise Inventory (5000 + 230)	$5,230.00
	Accounts Payable		$5,230.00
	(To record purchases and frieght)
09-Nov	Accounts Payable	$   200.00
	Merchandise Inventory		$   200.00
	(To record return)
14-Nov	Accounts Payable	$5,030.00
	Merchandise Inventory( 5030 x 4%)		$ 201
	Cash		$4,829