Question

Some of the transactions of Blossom Company during August are listed below. Blossom uses the periodic inventory method August 10 Purchased merchandise on account, $12.500, terms 2/10, 1/30 13 Returned part of the purchase of August 10, $1,300, and received credit on account 15 Purchased merchandise on account, $15,700, terms 1/10.1/60 25 Purchased merchandise on account, $19.800 terms 2/10, 1/30 28 Paid invoice of August 15 in full Assuming that purchases are recorded at gross amounts and that discounts are to be recorded when taken: Prepare general journal entries to record the transactions. Of 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) Date Account Titles and Explanation Debit Credit V eTextbook and Media Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses: Prepare general journal entries to enter the transactions. (If no entry is required, select "No entry for the account elles and enter for the amounts. Credit account titles are automatically Indented when amount is entered. Do not indent manually) Date Account Titles and Explanation Debit Credit V e Textbook and Media Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses: Prepare the adjusting entry necessary on August 31 if financial statements are to be prepared at that time. (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) Debit Date Account Titles and Explanation Aug. 31 Credit

Answer 1

Answer:

Assuming purchases are recorded at gross amount and discounts are to be recorded when taken

Date	Particulars	Debit ($)	Credit ($)
10 Aug	Purchases	12500
	Accounts payable		12500
13 Aug	Accounts payable	1300
	Purchase returns & Allowances		1300
15 Aug	Purchase	15700
	Accounts payable		15700
25 Aug	Purchase	19800
	Accounts payable		19800
28 Aug	Accounts payable	15700
	Cash		15700
	(Being net amount $15700 paid)

Assuming purchases are recorded at net amount and discounts lost are treated as financial expenses:

Date	Particulars	Debit ($)	Credit ($)
10 Aug	Purchase 12500-(12500*2%)	12250
	Accounts payable		12250
13 Aug	Accounts payable	1274
	Purchase return & Allowance 1300-(1300*2%)		1274
15 Aug	Purchase 15700-(15700*1%)	15543
	Accounts payable		15543
25 Aug	Purchase 19800-(19800*2%)	19404
	Accounts payable		19404
28 Aug	Accounts payable	15543
	Purchase Discount lost	157
	Cash		15700
	(Being net amount $15700 paid)

Assuming that purchases are recorded at net amounts and discount lost are treated as financial expenses:

Date	Particulars	Debit ($)	Credit ($)
31 Aug	Purchase Discount Lost (12500-1300)*2%	224
	Accounts payable		224
	(Being discount on 10 aug lost)

Note:
Purchases of 25 Aug can be paid till 3 Sep, to avail discount. its not yet lost as of 31 Aug.