Journalize the following inventory merchandise transactions, assuming that the company uses the perpetual inventory system. Refer to the Chart of Accounts for exact wording of account titles.

Dec. 1 Travis Company purchased merchandise on account from a supplier for $5,700, terms 2/10, net 30.

Dec. 6 Travis Company paid for the merchandise within the discount period.

Question

Lennon

Business

13 March, 02:56

Journalize the following inventory merchandise transactions, assuming that the company uses the perpetual inventory system. Refer to the Chart of Accounts for exact wording of account titles.

Dec. 1 Travis Company purchased merchandise on account from a supplier for $5,700, terms 2/10, net 30.

Dec. 6 Travis Company paid for the merchandise within the discount period.

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Answers (1)

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Lance Ayers · Answer 1

The journal entries are as follows:

(i) On December 1,

Merchandise inventory A/c Dr. $5,700

To Account payable $5,700

(To record the merchandise purchase on account)

(ii) On December 6,

Account payable A/c Dr. $5,700

To cash $5,586

To Merchandise inventory $114

(To record the payment of merchandise within the discount period)

Workings:

Cash = 98% * $5,700

= $5,586