Question

Journalize purchase transactions. E5.2 (LO 2) Information related to Kerber Co. is presented below. 1. On April 5, purchased merchandise on account from Wilkes Company for $23.000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes. 3. On April 7, purchased equipment on account for $26,000. 4. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,000 credit for returned merchandise. 5. On April 15, paid the amount due to Wilkes Company in full. -42 CHAPTER 5 Accounting for Merchandising Operations Instructions a. Prepare the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system. b. Assume that Kerber Co. paid the balance due to Wilkes Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

Answer 1

Requirement a:

Date	Account title and explanation	Debit	Credit
Apr 5	Invetory	$23,000
	Accounts payable		$23,000
	[To record purchase of inventory on account]
Apr 6	Inventory	$900
	Cash		$900
	[To record payment of freight]
Apr 7	Equipment	$26,000
	Accounts payable		$26,000
	[To record purchase of equipment on account]
Apr 8	Accounts payable	$3,000
	Inventory		$3,000
	[To record purchase allowance]
Apr 15	Accounts payable [23000-3000 allowance]	$20,000
	Inventory [$20,000 x 2%]		$400
	Cash		$19,600
	[To record cash paid for accounts payable]

Requirement b:

Date	Account title and explanation	Debit	Credit
May 4	Accounts payable [23000-3000 allowance]	$20,000
	Cash		$20,000
	[To record cash paid for accounts payable]