Question

Journal Entries for Merchandise Transactions-Perpetual System Webster Company was established on July 1. Its sales terms are 2/10, 1/30. Credit terms for its purchases vary with the supplier. Selected transactions for the first month of operations are given below. Unless noted, all transactions are on account and involve merchandise held for resale. Webster Company uses the perpetual inventory system July 1Purchased goods from Dawson, Inc. $2.400; terms 1/10. n/30. 2 Purchased goods from Penn Company, 14,700; terms 2/10, 130 3 Paid freighton shipment from Dawson, $150 5 Sold merchandise to Ward, Inc. $1.000 (51.475 cost) 5 Paid freighton shipment to Ward, Inc. $110./Hint: debit Delivery Expenses 8 Returned $300 worth of the goods purchased July 1 from Dawson, Inc, because some goods were damaged, Dawson approved the return 9 Received returned goods from Ward, Inc. worth $250 (5200 cost). 10 Paid Dawson, Inc., the amount due 10 Purchased goods from Dorn Company with a list price of $2.000. Terms 2/10,30 11 Paid freighton shipment from Dorn Company $180 15 Received the amount due from Ward, Inc 15 Sold merchandise to Colby Corporation, $3.700 (52.900 cost) 16 Mailed a check to Penn Company for the amount due on its July 2 invoice 10 18 Received an allowance of $150 from Dorn Company for defective merchandise purchased on 19 Paid Dorn Company the amount due 25 Received the amount due from Colby Corporation

also please show how to solve for number 10, 15, & 19

Answer 1

Webster Company

Journal

Date	Description	Debit $	Credit $
July					1/10 , n/30 (n stands for net) means the total credit period allowed is 30 days from date of purchase and if the payment is made within 10 days we will get a cash discount of 1% of the amount due
10	Accounts Payable	$                    2,100
	Inventory		$                   210
	Cash		$                1,890
	Paid Dawson inc. the amount due
10	Inventory	$                    2,900
	Accounts Payable		$                2,900
	Purchases from Dorn Co. , 2/10 , n/30
11	Inventory	$                        180
	Cash		$                   180
	Paid freight on Dorn Shipment
					2/10 , n/30 means the total credit period allowed is 30 days from date of Sales and if the payment is received within 10 days a cash discount of 2% of the amount due will be allowed
15	Cash	$                    1,519
	Sales Return and allowances	$                          31
	Accounts Receivable		$                1,550
	Received Amount due from Ward Inc. cash discount allowed for early payment
15	Accounts Receivable	$                    3,700
	Sales revenue		$                3,700
	Sales to Colby Corporation
15	Cost of goods sold	$                    2,900
	Inventory		$                2,900
	Cost of Goods Sold to Colby Corporation
16	Accounts Payable	$                    4,700			2/10 , n/30 means the total credit period allowed is 30 days from date of purchase and if the payment is made within 10 days we will get a cash discount of 2% of the amount due. But in this case payment is made after 10 days of purchases soo no cash discount for this payment
	Cash		$                4,700
	Paid Penn Copany the amount due
16	Accounts Payable	$                        150
	Purchase return and allowances		$                   150
	Received credit memo for price adjustment from Dorn Co.
19	Accounts Payable	$                    2,750			2/10 , n/30 means the total credit period allowed is 30 days from date of purchase and if the payment is made within 10 days we will get a cash discount of 2% of the amount due.
	Inventory		$                      55
	Cash		$                2,695
	Paid Dorn the amount due
25	Cash	$                    3,626			2/10 , n/30 means the total credit period allowed is 30 days from date of Sales and if the payment is received within 10 days a cash discount of 2% of the amount due will be allowed
	Sales Return and allowances	$                          74
	Accounts Receivable		$                3,700
	Received amount due from Colby Corporation ,cash discount allowed for early payment

Note : All the entries you have done till 9th July are correct.

If you have any doubts regarding the calcultions in the solution you can ask in comments , i will make sure all your doubts are solved.