Question

Refer to the data in P3.
In P3. Fulco Company engaged in the following transactions in March 2014:
Mar. 7 Sold merchandise on credit to James William, terms n/30, FOB shipping point, $3,000 (cost, $1,800).
8 Purchased merchandise on credit from Leverage Company, terms n/30, FOB shipping point, $6,000.
9 Paid Leverage Company for shipping charges on merchandise purchased on March 8, $254.
10 Purchased merchandise on credit from Rourke Company, terms n/30, FOB shipping point, $9,600, including $600 freight costs paid by Rourke.
14 Sold merchandise on credit to Deepak Soni, terms n/30, FOB shipping point, $2,400 (cost, $1,440).
14 Returned damaged merchandise received from Leverage Company on March 8 for credit, $600.
17 Received check from James William for his purchase of March 7.
19 Sold merchandise for cash, $1,800 (cost, $1,080).
20 Paid Rourke Company for purchase of March 10.
21 Paid Leverage Company the balance from the transactions of March 8 and March 14.
24 Accepted from Deepak Soni a return of merchandise, which was put back in inventory, $200 (cost, $120).

Required
1. Prepare journal entries to record the transactions, assuming use of the periodic inventory system.
2. Most companies call the first line of the income statement net sales. Other companies call it sales. Do you think these terms are equivalent and comparable? What would be the content of net sales? Why might a company use sales instead of net sales?



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  • CreatedMarch 26, 2014
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