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6 April, 10:46

Question:

Marshall Supplies is a janitorial supply store that uses perpetual inventory.

On July 4, Marshall purchases inventory from Tidy Wholesalers for $8,500 with terms 1/10, n/30.

On July 5, Marshall pays Express Transfer $45 for freight in on the July 4 order.

On July 7, Marshall buys an additional $11,985 in inventory from Tidy Wholesalers with terms 1/10, n/30.

On July 13, Marshall pays Tidy Wholesalers the balance due on both invoices.

Required:

Journalize the above transactions.

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Answers (1)
  1. 6 April, 10:56
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    The journal entries are shown below:

    1. Purchase A/c Dr $8,500

    To Accounts payable A/c $8,500

    (Being purchase of inventory is made on credit)

    2. Freight-in A/c Dr $45

    To Cash A/c $45

    (Being freight charges is paid for cash)

    3. Purchase A/c Dr $11,985

    To Accounts payable A/c $11,985

    (Being purchase of inventory is made on credit)

    4. Account payable A/c Dr $20,485 ($8,500 + $11985)

    To Cash A/c $20,280.15

    To Purchase discount A/c 204.85 ($20,485 * 1 %)

    (Being the payment is recorded)
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