Question: Prepare journal entries to record the following merchandising transactions of

Prepare journal entries to record the following merchandising transactions of Gore Company, which applies the perpetual inventory system. (It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Arotek.)
Aug. 1 Purchased merchandise from Arotek Company for $7,800 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.
4 At Arotek’s request, Gore paid $270 cash for freight charges on the August 1 purchase, reducing the amount owed to Arotek.
5 Sold merchandise to Larton Corp. for $5,460 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,898.
8 Purchased merchandise from Frees Corporation for $7,100 under credit terms of 1/10, n/45,
FOB shipping point, invoice dated August 8. The invoice showed that at Gore’s request, Frees paid the $240 shipping charges and added that amount to the bill.
9 Paid $120 cash for shipping charges related to the August 5 sale to Larton Corp.
10 Larton returned merchandise from the August 5 sale that had cost Gore $649 and been sold for $910. The merchandise was restored to inventory.
12 After negotiations with Frees Corporation concerning problems with the merchandise purchased on August 8, Gore received a credit memorandum from Frees granting a price reduction of $1,100.
15 Received balance due from Larton Corp. for the August 5 sale less the return on August 10.
18 Paid the amount due Frees Corporation for the August 8 purchase less the price reduction granted.
19 Sold merchandise to Jones Co. for $4,680 under credit terms of 110, n30, FOB shipping point, invoice dated August 19. The merchandise had cost $3,247.
22 Jones requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Gore sent Jones a $780 credit memorandum to resolve the issue.
29 Received Jones’s cash payment for the amount due from the August 19 sale.
30 Paid Arotek Company the amount due from the August 1 purchase.

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  • CreatedMarch 18, 2015
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