Question

The following selected transactions were completed by Dom Co. during July of the current year. Dom uses the perpetual inventory system. Journalize the transactions.

Jul. 3.	Purchased $16,100 of merchandise on account, FOB shipping point, terms 2/15, n/30, with prepaid freight of $180.
6.	Paid freight of $180 on the July 3 purchase.
7.	Returned $1,600 of the merchandise purchased on July 3.
14.	Sold merchandise on account, $32,100, FOB destination, 1/10, n/30. The cost of goods sold was $21,500.
16.	Paid freight of $205 for the merchandise sold on July 14.
18.	Paid for the purchase of July 3 less the return and discount.
24.	Received payment on account for the sale of July 14 less the discount.

Answer 1

Journal Entries
Date	ACCT Title and explanation	Debit	Credit
July, 03	Merchandise inventory	$16,100
	Account Payable		$16,100
July, 06	Merchandise inventory	$180
	Cash		$180
July, 07	Account Payable	$1,600
	Merchandise inventory		$1,600
July, 14	Account Receivable	$32,100
	Sales Revenue		$32,100
July, 14	Cost of Goods Sold	$21,500
	Merchandise inventory		$21,500
July, 16	Freight Out	$205
	Cash		$205
July, 18	Account Payable ($16,100 - $ 1600)	$14,500
	Purchase Discount (14,500 X 2%)		$290
	Cash		$14,210
July, 24	Cash	$31,779
	Sales Discount ($ 32,100 X 1%)	$321
	Account Receivable		$32,100