Post, Freight and Carriers

Journalize the following transactions under a perpetual inventory system?

1. On April 5, purchased merchandise from Allman Company for $20,900 terms 2/10, net/30, FOB shipping point. 2. On April 6 paid freight costs of $927 on merchandise purchased from Allman. 3. On April 7, purchased equipment on account for $30,100. 4. On April 8, returned damaged merchandise to Allman Company and was granted a $4,400 allowance for returned merchandise. 5. On April 15 paid the amount due to Allman Company in full. Assume that Gilberto Co. paid the balance due to Allman Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

Public Comments

1. 1. -Dr- Merchandise Inventory 20900 -Cr- Trade Accounts Payable 20900 2. -Dr- Freight-in 927 -Cr- Cash 927 3. -Dr- Plant Property & Equipment 30100 -Cr- Accounts Payable 30100 4. -Dr- Allowance for Damaged merchandise 4400 -Cr- Merchandise Inventory 4400 5. -Dr- Trade Accounts payable 20900 -Cr- Allowance for damaged merchandise 4400 -Cr- Purchase discounts 310 -Cr- Cash 16190 Discount = (20900-4400) * 2%, because it was paid in 10 days per the agreement
2. 1. On April 5, purchased merchandise from Allman Company for $20,900 terms 2/10, net/30, FOB shipping point Dr Merchandise inventory 20,900 Cr Accounts Payable 20,900 2. On April 6 paid freight costs of $927 on merchandise purchased from Allman Dr Merchandise inventory (freight-in) 927 Cr Cash 927 3. On April 7, purchased equipment on account for $30,100 Dr Equipment 30,100 Cr A/cs Payable 30,100 4. On April 8, returned damaged merchandise to Allman Company and was granted a $4,400 allowance for returned merchandise Dr A/cs payable 4,400 Cr Merchandise inventory (purchase returns & allowances) 4,400 5. On April 15 paid the amount due to Allman Company in full Dr A/cs payable 16,500 Cr Merchandise inventory (purchase discount) 330 Cr Cash 16,170