Question 1 - Information related to Steffens Co. is presented below.
1. On April 5, purchased merchandise from Bryant Company for $25,000 terms 2/10, net/30,
FOB shipping point.
2. On April 6 paid freight costs of $900 on merchandise purchased from Bryant.
3. On April 7, purchased equipment on account for $26,000.
4. On April 8, returned damaged merchandise to Bryant Company and was granted a $4,000 credit for returned merchandise.
5. On April 15 paid the amount due to Bryant Company in full.
Instructions
(a) Prepare the journal entries to record these transactions on the books of Steffens Co. under a perpetual inventory system.
(b) Assume that Steffens Co. paid the balance due to Bryant Company on May 4 instead of April 15. Prepare the journal entry to record this payment.
Question 2 - On September 1, Howe Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred.
Sept. 6 Purchased 80 calculators at $20 each from DeVito Co. for cash. 9 Paid freight of $80 on calculators purchased from DeVito Co. 10 Returned 2 calculators to DeVito Co. for $42 credit (including freight) because they did not meet specifications. 12 Sold 26 calculators costing $21 (including freight) for $31 each to Mega Book Store, terms n/30. 14 Granted credit of $31 to Mega Book Store for the return of one calculator that was not ordered. 20 Sold 30 calculators costing $21 for $31 each to Barbara's Card Shop, terms n/30.
Instructions - Journalize the September transactions.
Question 3 - On June 10, Meredith Company purchased $8,000 of merchandise from Leinert Company, FOB shipping point, terms 2/10, n/30. Meredith pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Leinert for credit on June 12. The scrap value of these goods is $150. On June 19, Meredith pays Leinert Company in full, less the purchase dis¬count. Both companies use a perpetual inventory system.
Instructions -
(a) Prepare separate entries for each transaction on the books of Meredith Company.
(b) Prepare separate entries for each transaction for Leinert Company. The merchandise purchased by Meredith on June 10 had cost Leinert $5,000.
Question 4 - Presented below are transactions related to Wheeler Company.
1. On December 3, Wheeler Company sold $500,000 of merchandise to Hashmi Co., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was $350,000.
2. On December 8, Hashmi Co. was granted an allowance of $27,000 for merchandise purchased on December 3.
3. On December 13, Wheeler Company received the balance due from Hashmi Co.
Instructions
(a) Prepare the journal entries to record these transactions on the books of Wheeler Company using a perpetual inventory system.
(b) Assume that Wheeler Company received the balance due from Hashmi Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2.