|Purpose:||(L.O. 2) This exercise reviews the journal entries to record purchases of merchandise inventory under a perpetual inventory system.|
A list of transactions for the Garth Brooks Memorabilia Sales Company appears below. A perpetual inventory system is used.
|July||1 Purchased merchandise from Oliver Company for $3,000 cash.
2 Purchased merchandise from Medlin Company, $5,000, FOB shipping point, terms 2/10, n/30.
6 Paid freight on July 2 purchase, $125.
10 Paid Medlin Company the amount owed.
11 Purchased merchandise from McBride Company, $7,000, FOB destination, terms 1/10, n/30.
23 Paid McBride Company the amount owed.
|Aug.||7 Purchased merchandise from Dun Company, $4,000, FOB destination, terms 2/10, n/30.
9 Returned one-fourth of the merchandise acquired in the August 7 transaction to Dun Company because of detected defects.
16 Paid Dun Company the balance owed.
Prepare the journal entries to record these transactions on the books of the Garth Brooks Memorabilia Sales Company.