Page 273 - Accounting Principles (A Business Perspective)

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The buyer paid the amount due on the last day of the discount period. Record all of the entries required on the
books of both the buyer and the seller.
Alternate problem C Gardner Company engaged in the following transactions in June 2010, the company's

first month of operations:
June 1 Stockholders invested USD 384,000 cash and USD 144,000 of merchandise inventory in the business in
exchange for capital stock.
3 Merchandise was purchased on account, USD 192,000; terms 2/10, n/30, FOB shipping point, freight collect.
4 Paid height on the June 3 purchase, USD 5,280.
7 Merchandise was purchased on account, USD 96,000; terms 2/10, n/30, FOB destination, freight prepaid.
10 Sold merchandise on account, USD 230,400; terms 2/10, n/30, FOB shipping point, freight collect.

11 Returned USD 28,800 of the merchandise purchased on June 3.
12 Paid the amount due on the purchase of June 3.
13 Sold merchandise on account, USD 240,000; terms 2/10, n/30, FOB destination, height prepaid.
14 Paid height on sale of June 13, USD 14,400.
20 Paid the amount due on the purchase of June 7.
21 USD 48,000 of the goods sold on June 13 were returned for credit.
22 Received the amount due on sale of June 13.
25 Received the amount due on sale of June 10.
29 Paid rent for the administration building for June, USD 19,200.

30 Paid sales salaries of USD 57,600 for June.
30 Purchased merchandise on account, USD 48,000; terms 2/10, n/30, FOB destination, freight prepaid.
The inventory on hand on June 30 was USD 288,000.
a. Prepare journal entries for the transactions.
b. Post the journal entries to the proper ledger accounts. Use the account numbers in the chart of accounts
shown in a separate file at the end of the text. Assume that all postings are from page 10 of the general journal.
c. Prepare a trial balance as of 2010 June 30.

d. Prepare a classified income statement for the month ended 2010 June 30. No adjusting entries are needed.
Alternate problem D Organized on 2010 May 1, Noah Cabinet Company engaged in the following
transactions:
May 1 The stockholders invested USD 900,000 in this new business by purchasing capital stock.
1 Purchased merchandise on account from String Company, USD 46,800; terms n/60, FOB shipping point,
freight collect.
3 Sold merchandise for cash, USD 28,800.
6 Paid transportation charges on May 1 purchase, USD 1,440 cash.
7 Returned USD 3,600 of merchandise to String Company due to improper size.

10 Requested and received an allowance of USD 1,800 from String Company for improper quality of certain
items.
14 Sold merchandise on account to Texas Company, USD 18,000; terms 2/20, n/30, FOB shipping point, freight
collect.
16 Issued cash refund for return of merchandise relating to sale made on May 3, USD 180.

Accounting Principles: A Business Perspective 274 A Global Text