Question

JUUillaL coupom E5-4 On June 10, Tuzun Company purchased $8,000 of merchandise from Epps Com FOB shipping point, terms 2/10, n/30. Tuzun pays the freight costs of $400 on June Damaged goods totaling $300 are returned to Epps for credit on June 12. The fair valu. of these goods is $70. On June 19, Tuzun pays Epps Company in full, less the purchase discount. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Tuzun Company. (b) Prepare separate entries for each transaction for Epps Company. The merchandise purchased by Tuzun on June 10 had cost Epps $4.800

Answer 1

Answer is given below

Perpetual inventory system Books of Tuzun Company | Date Credit Account title and explanation | Debit Merchandise inventory $8,000 To Accounts payable (Being merchandise inventory purchased) $8,000 $400 June 11 Merchandise inventory To Cash (Being freight charges incurred) $400 June 12 $300 Accounts payable To Merchandise inventory (Being damaged goods returned) $300 June 19 $7,700 Accounts payable To Merchandise inventory To Cash $154|2% of $7,700 $7,546 ($7,700-$154) Books of Epps Company Credit Date June 10 Debit $8,000 Account title and explanation Accounts receivable To Sales (Being sales recorded) $8,000 $4,800 Cost of Goods sold To Merchandise inventory (Being Cost of goods sold recorded) $4,800 June 12 $300 Sales returns and allowances To Accounts receivable (Being damaged goods returned) $300 $701 Merchandise inventory To Cost of goods sold (Being Cost of goods sold recorded) $70 June 19 $7,546 $154 Cash Sales discounts To Accounts receivable (Being payments received) ($7,700-$154) 2% of $7,700 $7,700