ACC 291T Wk 1 – Practice: Connect Knowledge Check (2021 New)

Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system.

Sept.		15		Purchased merchandise with an invoice price of $72,500 and credit terms of 5/5, n/15.
Sept.		29		Paid supplier the amount owed on the September 15 purchase.

2.Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.

Apr.	2	Purchased $4,800 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
	3	Paid $330 cash for shipping charges on the April 2 purchase.
	4	Returned to Lyon Company unacceptable merchandise that had an invoice price of $800.
	17	Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
	18	Purchased $8,900 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.
	21	After negotiations, received from Frist a $500 allowance toward the $8,900 owed on the April 18 purchase.
	28	Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

3.

Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system.

Aug.		1		Purchased merchandise with an invoice price of $96,000 and credit terms of 2/10, n/30.
Aug.		11		Paid supplier the amount owed from the August 1 purchase.

4. Required information

[The following information applies to the questions displayed below.]

Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.

May	3	Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $11 cash per unit (for a total cost of $22,000).
	5	Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $11,000.
	7	Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,500). Allied restores the units, which cost $1,100, to its inventory.
	8	Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction (allowance) and credits Macy’s accounts receivable for $700 to compensate for the damage.
	15	Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.

Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)

Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method.

Nov.	5	Purchased 1,500 units of product at a cost of $40 per unit. Terms of the sale are 4/10, n/60; the invoice is dated November 5.
Nov.	7	Returned 35 defective units from the November 5 purchase and received full credit.
Nov.	15	Paid the amount due from the November 5 purchase, minus the return on November 7.

Fit-for-Life Foods reports the following income statement accounts for the year ended December

Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.

May	11	Sydney accepts delivery of $34,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $22,780. Sydney pays $350 cash to Express Shipping for delivery charges on the merchandise.
	12	Sydney returns $1,400 of the $34,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $938.
	20	Sydney pays Troy for the amount owed. Troy receives the cash immediately.

(Both Sydney and Troy use a perpetual inventory system and the gross method.)

1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.

2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.

Santa Fe Retailing purchased merchandise “as is” (with no returns) from Mesa Wholesalers with credit terms of 3/10, n/60 and an invoice price of $24,900. The merchandise had cost Mesa $16,982. Assume that both buyer and seller use a perpetual inventory system and the gross method.

1. Prepare entries that the buyer records for the (a) purchase, (b) cash payment withinthe discount period, and (c) cash payment after the discount period.

2. Prepare entries that the seller records for the (a) sale, (b) cash collection within the discount period, and (c) cash collection after the discount period.