|Purpose:||(L.O. *6) This exercise reviews the journal entries to record purchases of merchandise inventory under a periodic inventory system.|
A list of transactions for the Randy Travis Sales Company appears below. A periodic 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 Randy Travis Sales Company.