Question

Transactions for Buyer and Seller Shore Co. sold merchandise to Blue Star Co. on account, $110,300, terms FOB shipping point, 2/10, n/30. The cost of the goods sold is $66,180. Shore paid freight of $2,000. þournalize Shore Co.'s entry for the sale, purchase, and payment of amount due, using the net method under a perpetual inventory system. If an amount box does not require an entry, leave it blank. DO OD Journalize Blue Star Coi's entry for the sale, purchase, and payment of amount due. If an amount box does not require an entry, leave it blank

Answer 1

1)

Account titles and explanation	Debit	Credit
Accounts receivable- Blue Star Co. (110300*98%)	$108094
Sales		$108094
(To record sales)
Cost of goods sold	$66180
Merchandise inventory		$66180
(To record cost of goods sold)
Accounts receivable- Blue Star Co.	$2000
Cash		$2000
(To record freight paid)
Cash (108094+2000)	$110094
Accounts receivable- Blue Star Co.		$110094
(To record amount received)

2)

Account titles and explanation	Debit	Credit
Merchandise inventory (110300*98%)+1800	$110094
Accounts payable- Shore Co.		$110094
(To record inventory purchased)
Accounts payable- Shore Co.	$110094
Cash (108094+2000)		$110094
(To record amount paid)

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