Question

E5-2 Information related to Duffy Co., Ltd. is presented below. 

 1. On April 5, purchased merchandise from Thomas Company, Ltd. for £25,000, terms transactions.

 2/10, net/30, FOB shipping point. (LO2) 2. On April 6, paid freight costs of £900 on merchandise purchased from Thomas.

 3. On April 7, purchased equipment on account for £26,000.

 4. On April 8, returned damaged merchandise to Thomas and was granted a £2,600 credit for returned merchandise.

 5. On April 15, paid the amount due to Thomas in full. 

Instructions 

(a) Prepare the journal entries to record these transactions on the books of Duffy Co., Ltd. under a perpetual inventory system. 

(b) Assume that Duffy Co., Ltd. paid the balance due to Thomas Company, Ltd. on May 4 instead of April 15. Prepare the journal entry to record this payment.

Answer 1

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