Chapter 5 - Practice Problems (Purchase of Inventory) Problem 1 Oct 1, ABC Company purchased $125,000 of merchandise from a supplier on account, terms 5/10, n/30. Date Accounts Dr Cr ABC Company returned $32,000 of the merchandise, receiving a credit memo, Date Accounts Dr Cr Oct 10, the company paid the amount due within the discount period. Date Accounts Dr Cr Problem #2 Nov 12, ABC Company purchased $285,500 of merchandise from a supplier on account, terms 3/10, n/30 Date Accounts Dr Nov 20, ABC Company returned $62,375 of the merchandise, receiving a credit memo. Date Accounts Dr Cr Nov 22, the company paid the amount due within the discount period. Date Accounts Dr Cr Chapter 5 - Practice Problems (Purchase of Inventory & Prepaid Freight) Problem #3: [Prepaid Freight] April 1, ABC Company purchased merchandise from Pink Company, $10,850, terms FOB Shipping Point, 2/10, n/eom. Prepaid freight of $200 was added to the invoice. Date Accounts Dr Cr Inventory Price Less discount Net Inventory Price Freight Inventory/Accounts Payable April 11, the company paid the amount due within the discount period. Date Accounts Dr Cr Chapter 5 - Practice Problems (Sale of Inventory) Problem #4 (Sale of inventory on credit, receipt of cash & return) Nov 4, sold merchandise on account, $6,200. The cost of the merchandise sold was $4,900. The invoice terms were 2/10, n/30. Date Accounts Dr Cr Nov 14, received full payment from customer Date Accounts Dr Cr Dec 2, paid customer a cash refund of $1,050 for returned merchandise from the Nov 1 sale. The cost of the merchandise returned was $890. Date Accounts Dr Cr Problem #5: Cash Sales Sept 8, Sold merchandise for $12,960 cash. The cost of the merchandise was $9.920. Date Accounts Cr Chapter 5 - Practice Problems (Sale of Inventory using Bank Credit Cards) Problem #6: Sales using Bank Credit Cards Jan 12, sold merchandise on VISA, $510,000. The cost of the merchandise was $398,500 Date Accounts Dr Jan 31, paid VISA Service fee of $7,650