To illustrate, Seller Co. sells merchandise to Buyer Inc. on account for $810. The freight terms...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
To illustrate, Seller Co. sells merchandise to Buyer Inc. on account for $810. The freight terms are FOB shipping point and Buyer, Inc. pays $57 in cash to the freight company directly when the merchandise is delivered to Buyer Inc. The cost of the merchandise is $568. Both companies use a perpetual inventory system. Fill in the amounts in the sales entries for Seller Co. and the inventory purchase entries for Buyer Inc. Roll over the accounts for help with the transactions. Seller Co. Debit Credit Accounts Receivable-Buyer Inc. Sales To record the sale to Buyers Inc. Cost of Goods Sold Merchandise Inventory To record the cost of goods sold to Buyer Inc. Buyer Inc. Merchandise Inventory Accounts Payable-Seller Co. To record the purchase of inventory from Seller Co. Merchandise Inventory Cash To record the cost of shipping goods to Buyer Inc. Debit Credit Reed Corp. is a medium-sized manufacturer of electronic components that supplies Brady Co. with many component parts. Brady Co. also supplies Reed with some of the finished products it develops. Hence, both companies purchase from and sell merchandise to each other. Both companies are located in Oregon, which s no sales tax, and both companies use a perpetual inventory system. Therefore, sales tax does not apply to any of these transactions and you should record merchandise transactions using the perpetual inventory method. Analyze each transaction (described by rolling over the date) from the perspective of each party. In the first journal space, record each transaction as it affects Reed Corp., on the appropriate day. Then record the same transaction in the bottom journal space as it affects Brady Co. If no entry is required, select "No entry required" and leave the amount boxes blank. If compound entries, for those boxes in which no entry is required, leave the box blank. Date May 2 May 3 May 7 May 8 May 10 May 14 May 15 Reed Corp. Accounts Receivable-Brady Co. ✓ Sales Cost of Goods Sold ✓ Merchandise Inventory ✓ No entry required ✔ No entry required ✓ Merchandise Inventory ✓ Accounts Payable-Brady Co. ✓ No entry required ✓ No entry required ✓ Sales Returns and Allowances ✔ Accounts Receivable-Brady Co. ✓ Merchandise Inventory ✓ Cost of Goods Sold ✓ Cash Accounts Receivable-Brady Co. ✓ Accounts Payable-Brady Co. ✔ Cash ✔ Debit Credit IIIII Date May 2 May 3 May 7 May 8 May 10 May 14 May 15 Merchandise Inventory ✓ Brady Co. Merchandise Inventory ✓ Accounts Payable-Reed Corp. Merchandise Inventory ✓ Cash ✔ Accounts Receivable-Reed Corp. ✔ Sales Cost of Goods Sold ✓ Merchandise Inventory ✓ Delivery Expense ✔ Cash ✔ Accounts Payable-Reed Corp. ✔ Merchandise Inventory ✓ Accounts Payable-Reed Corp. Cash ✔ Cash ✔ Sales Discounts ✔ Accounts Receivable-Reed Corp. ✔ Debit Credit I To illustrate, Seller Co. sells merchandise to Buyer Inc. on account for $810. The freight terms are FOB shipping point and Buyer, Inc. pays $57 in cash to the freight company directly when the merchandise is delivered to Buyer Inc. The cost of the merchandise is $568. Both companies use a perpetual inventory system. Fill in the amounts in the sales entries for Seller Co. and the inventory purchase entries for Buyer Inc. Roll over the accounts for help with the transactions. Seller Co. Debit Credit Accounts Receivable-Buyer Inc. Sales To record the sale to Buyers Inc. Cost of Goods Sold Merchandise Inventory To record the cost of goods sold to Buyer Inc. Buyer Inc. Merchandise Inventory Accounts Payable-Seller Co. To record the purchase of inventory from Seller Co. Merchandise Inventory Cash To record the cost of shipping goods to Buyer Inc. Debit Credit Reed Corp. is a medium-sized manufacturer of electronic components that supplies Brady Co. with many component parts. Brady Co. also supplies Reed with some of the finished products it develops. Hence, both companies purchase from and sell merchandise to each other. Both companies are located in Oregon, which s no sales tax, and both companies use a perpetual inventory system. Therefore, sales tax does not apply to any of these transactions and you should record merchandise transactions using the perpetual inventory method. Analyze each transaction (described by rolling over the date) from the perspective of each party. In the first journal space, record each transaction as it affects Reed Corp., on the appropriate day. Then record the same transaction in the bottom journal space as it affects Brady Co. If no entry is required, select "No entry required" and leave the amount boxes blank. If compound entries, for those boxes in which no entry is required, leave the box blank. Date May 2 May 3 May 7 May 8 May 10 May 14 May 15 Reed Corp. Accounts Receivable-Brady Co. ✓ Sales Cost of Goods Sold ✓ Merchandise Inventory ✓ No entry required ✔ No entry required ✓ Merchandise Inventory ✓ Accounts Payable-Brady Co. ✓ No entry required ✓ No entry required ✓ Sales Returns and Allowances ✔ Accounts Receivable-Brady Co. ✓ Merchandise Inventory ✓ Cost of Goods Sold ✓ Cash Accounts Receivable-Brady Co. ✓ Accounts Payable-Brady Co. ✔ Cash ✔ Debit Credit IIIII Date May 2 May 3 May 7 May 8 May 10 May 14 May 15 Merchandise Inventory ✓ Brady Co. Merchandise Inventory ✓ Accounts Payable-Reed Corp. Merchandise Inventory ✓ Cash ✔ Accounts Receivable-Reed Corp. ✔ Sales Cost of Goods Sold ✓ Merchandise Inventory ✓ Delivery Expense ✔ Cash ✔ Accounts Payable-Reed Corp. ✔ Merchandise Inventory ✓ Accounts Payable-Reed Corp. Cash ✔ Cash ✔ Sales Discounts ✔ Accounts Receivable-Reed Corp. ✔ Debit Credit I
Expert Answer:
Answer rating: 100% (QA)
Question 1 To record the sale to Buyer Inc Seller Co Accounts Receivable Buyer Inc 810 Debit Sales 810 Credit To record the cost of goods sold to Buye... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May: Date Transaction_______________________________________________ May 1 Made cash...
-
The Stern Company uses a perpetual inventory system and has prepared the following adjusted trial balance on December 31, 2007: Required Prepare in proper form for 2007 the company's: (1) Income...
-
A purchase return or allowance under a perpetual inventory system is credited to: A) Accounts Payable B) Purchase Returns and Allowances C) Inventory D) Purchases
-
On January 18, 2021, Marigold Co. paid $450,000 for a three-year insurance policy that covers February 1, 2021 through January 31, 2024. Marigold's year end is June 30, 2021. Assuming she records the...
-
Times TeleComs PPE Subledger at January 1, 2014, appeared as follows: Additional information: 1 The company calculates depreciation and amortization to the nearest whole month. 2 S/L = Straight-line;...
-
Poodle Pets Company has asked for your assistance in preparing its cash flow statement for 20X1. Among other items, its 20X1 income statement shows sales revenue (net) of $270 000, cost of goods sold...
-
Design Data sold a piece of machinery to HHB Drafting Company. However, after HHB had taken possession of the machine, it discovered damage and revoked the contract. The court found that the...
-
In eight years, Kent Duncan will retire. He is exploring the possibility of opening a self-service car wash. The car wash could be managed in the free time he has available from his regular...
-
A customer enters a doctors office to acquire information about swine flu and the potential impact of the influenza. She speaks Creole and is lost in the building. Finally, she is able to locate a...
-
Mr. M has been employed as an engineer by A Ltd., a company incorporated in Hong Kong. During the year ended 31 March 2019, Mr. M had the following income and expenditure. A monthly salary of...
-
What will come in place of the question mark in the following question? (V5 1)2 = ? 2v5 | 1. 2 2. 4 3. 6 4. 36 None of these 5.
-
Select a criminal justice program that would be subject to evaluation. It can be from any state, local, or federal organization. Describe the criminal justice program you selected. Identify the...
-
Processes in Criminal Justice Organizations are the systems that criminal justice administrators set up that heavily influence how quickly their organizations progress. We look at four different...
-
The Change Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $3,100...
-
A spring has a relaxed length of 26 cm (0.26 m) and its spring stiffness is 10 N/m. You glue a 70 gram block (0.070 kg) to the top of the spring, and push the block down, compressing the spring so...
-
Forensic accounting is interesting to me because it demands an analytical approach beyond the numerical data to unveil any potential criminal activity. Presently, I am employed at a bank where I have...
-
Imagine that we have two different forecasting models. Let's call them Model A and Model B. We used these models to forecast the next five periods. In the table below you can find the forecast of...
-
Aztec Furnishings makes hand-crafted furniture for sale in its retail stores. The furniture maker has recently installed a new assembly process, including a new sander and polisher. With this new...
-
What is an advantage of using the percent of receivables method of estimating uncollectible accounts expense?
-
One Hour Laundry Services purchased a new steam press machine on January 1, for $45,000. It is expected to have a five-year useful life and a $5,000 salvage value . One Hour expects to use the...
-
What is a contingent liability?
-
Figure P2.4 shows a graph of position versus frame number from a video clip of a moving object. Describe this motion from beginning to end, and state any assumptions you make. Data from Figure P2.4...
-
What minimum information must be extracted from a video clip of a moving object in order to quantify the object's motion?
-
The sequence in Figure P2.3 represents a ball that is initially held above the ground. In the first frame the ball is released. In subsequent frames the ball falls, bounces on the ground, rises, and...
Study smarter with the SolutionInn App