Question

Bushard Company (buyer) and Schmidt, Inc. (seller) engaged in the following transactions during February 2019. Bushard Company DATE TRANSACTIONS 2019 Feb. 10 Purchased merchandise for $6,680 from Schmidt, Inc., Invoice 1980, terms 1/10, n/30. 13 Received Credit Memorandum 230 from Schmidt, Inc., for damaged merchandise totaling $360 that was returned; the goods were purchased on Invoice 1989, dated February 10. 19 Paid amount due to Schmidt, Inc., for Invoice 1989 of February 19, less the return of February 13 and less the cash discount, Check 2010. Schmidt, Inc. DATE TRANSACTIONS 2019 Feb. 10 Sold merchandise for $6,600 on account to Bushard Company, Invoice 1980, terms 1/10, n/3e. The cost of merchandise sold was $3,800. 13 Issued Credit Memorandum 230 to Bushard Company for damaged merchandise totaling $360 that was returned; the goods were purchased on Invoice 1980, dated February 10. The cost of the returned goods was $280. 19 Received payment from Bushard Company for Invoice 1980 of February 10, less the return of February 13 and less the cash discount, Check 2010. Both companies use the perpetual inventory system. Journalize the transactions above in a general Journal for and Schmidt, Inc. (Round final answers to the nearest whole dollar value.) Complete this question by entering your answers in the tabs below. Richard

Answer 1

Journal entries
Date	Account	Debit	Credit		Calculation
Bushard Company
10-Feb	Inventory	6,600
	Accounts Payable		6,600
13-Feb	Accounts Payable	360
	Inventory		360
19-Feb	Accounts Payable	6,240			=6,600-360
	Cash		6,178
	Inventory		62		=6,240*1%
Terms 1/10, n/30 means that 1% discount will be given if invoice is paid within 10 days
Otherwise the full invoice falls due in 30 days
Schmidt Company
10-Feb	Accounts Receivable	6,600
	Sales		6,600
10-Feb	Cost of goods sold	3,800
	Inventory		3,800
13-Feb	Sales Returns & Allowances	360
	Accounts Receivable		360
13-Feb	Inventory	280
	Cost of goods sold		280
19-Feb	Cash	6,178
	Sales Discounts	62			=6,240*1%
	Accounts Receivable		6,240		=6,600-360