Question

Instructions The following selected transactions were completed by Air Systems Company during January of the current year. Air Systems Company uses the periodic inventory system. Purchased $18,700 of merchandise on account, FOB shipping Jan. 2 point, terms 2/15, n/30. Paid freight of $240 on the January 2 purchase. 5 Returned $2,400 of the merchagdise purchased on January 2 6 Sold merchandise on account, $34,100, FOB destination, 1/10, 13 n/30. The cost of merchandise sold was $22,200. Paid freight of $245 for the merchandise sold on January 13. 15 17 Paid for the purchase of January 2 less the return and discount. Received payment on account for the sale of January 13 less the 23 discount.

Answer 1

JOURNAL						ACCOUNTING EQUATION
	Date	Description	Post. Ref.	Debit	Credit	Assets	Liabilities	Equity
1	Jan 2	Purchases		$18700				↓
2		Accounts Payable			$18700		↑
3		(To record inventory purchases on account)
4
5	Jan 5	Freight in		$240				↓
6		Cash			$240	↓
7		(To record freight-in paid)
8
9	Jan 6	Accounts payable		$2400			↓
10		Purchase returns and allowances			$2400			↑
11		(To record inventory returned)
12
13	Jan 13	Accounts receivable (34100-1%*34100)		$33759		↑
14		Sales			$33759			↑
15		(To record inventory sold on account)
16
17	Jan 15	Delivery expense		$245				↓
18		Cash			$245	↓
19		(To record delivery expenses paid)
20
21	Jan 17	Accounts payable (18700-2400)		$16300			↓
22		Purchase discounts (18700-2400)*2%			$326			↑
23		Cash (16300-326)			$15974	↓
24		(To record cash paid)
25
26	Jan 23	Cash (34100-1%*34100)		$33759		↑
27		Sales discounts (34100-33759)		$341				↓
28		Accounts receivable			$34100	↓
29		(To record payment received)