Question

Qr, The foilowing is a sevles of related transactions between ABC store, a shoe wholesaler, chain of retaf shoe stores Feb.9 ABC Store sold xYz Store 150 pairs of hiking boots on account, terms 2/10, n/3o. The cost of these boots ro ABc Store was 5500 per pair, and the sales price was $800 per pair Feb. 12 United Express charged $1,000 for delivering this merchandise to XVZ Store. These charges were split evenly between the buyer and seller and were paid immediately in cash Feb. 13 XYZ Store returned 10 pairs of boots to ABC Store because they were the wrong size. ABC Store allowed XYZ Store full credit for this return Feb. 19 XYZ Store paid the remaining balance due to ABC Store within the discount period a) Record this series of transactions in the general journal of ABC Store (The company records sales at gross sales price) b) Record this series of transactions in the general journal of XYZ Store ( The company records purchases of merchandise at net cost and uses a Transportation-in account to record transportation charges on inbound shipments)

Answer 1

Answer

ABC XYZ Debit Debit Date General Journal Credit Date General Journal Credit Feb 9 Accounts Receivable 120,000 Feb 9 Inventorv 117,600 120,000 Accounts Pavable 117,600 Sales Revenue Cost of Goods Sold 75,000 75,000 Inventory Feb 12 Transportation-out 500 Feb 12 Transportation-in 500 Cash 500 Cash 500 7.840 Feb 13 Sales Returns & Allowances 8,000 Feb 13 Accounts Pavable Accounts Receivable 8,000 7,840 Inventor Inventorv 5,000 5,000 Cost of Goods Sold Feb 19 Cash 109,760 Accounts Pavable 109,760 Cash Sales Discount 2,240 109,760 Accounts Receivable 112,000