To illustrate, Seller Co. sells merchandise to Buyer Inc. on account for $810. The freight terms...

   

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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

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