(2) Journalize the August transactions for Beartooth Co.

General Journal Instructions

Question not attempted.

PAGE 15

JOURNAL

ACCOUNTING EQUATION

Score: 0/201

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY

Points:

0 / 40

Check My Work

General hint: Journalize Beartooth Co. transactions from the buyer's point of view.

Aug. 1:

Buyer - Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Under FOB shipping point, freight is paid by the buyer, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.

Aug. 2:

Buyer Not applicable.

Aug. 5:

Buyer - Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Under FOB shipping point, freight is paid by the buyer, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.

Aug. 9:

Buyer - Payment of freight expense is added to the Cost of the Merchandise and is typically prepaid in cash.

General hint: FOB shipping point freight is the buyer's cost, while FOB destination freight is the seller's expense.

Aug. 15:

Buyer - Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Added freight expense increases the Cost of the Merchandise.

Aug. 16:

Buyer - Since the invoice is paid within the discount period, buyer debits Accounts Payable and credits Cash and for the discounted amount.

Aug. 20:

Buyer - Since the invoice is paid within the discount period, buyer debits Accounts Payable and credits Cash and for the discounted amount.

Aug. 31:

Buyer - Since no discount was offered, no discounts are recorded. The cash paid on account is in each case is equal to the invoice and reduces the Accounts Receivable for the seller and the Accounts Payable for the buyer.