Question

On June 10, Marin Company purchased $6,200 of merchandise from Cullumber Company, on account, terms 4/10, 1/30. Marin pays the freight costs of $100 on June 11. Goods totale $300 are returned to Cullumber for credit on June 12. On June 19, Marin Company pays Culumber Company in full less the purchase discount. Both companies use a perpetual Inventory system Your answer is partially correct. Prepare separate entries for each transaction on the books of Marin Company. (If no entry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically Indented when amount is entered. Do not Indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit June 10 Inventory Accounts Payable Inventory Cash Accounts Payable Inventory Accounts Payable

Answer 1

In the books of Marine company:

Date	Account Titles and Explanation	Debit	Credit
June 19	Accounts payable	$5,900	-
	Cash ($5,900 X 96%)	-	$5,664
	Inventory ($5,900 X 4%)	-	$236

In the books of Cullumber company:

Date	Account Titles and Explanation	Debit	Credit
June 12	Sales returns and allowance	$300	-
	Accounts receivable	-	$300
June 19	Cash	$5,664	-
	Sales discount	$236	-
	Account receivable	-	$5,900