O'Reilly logo

Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition by Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

*EXERCISE 5-7

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.

Instructions

Prepare the journal entries to record these transactions on the books of the Randy Travis Sales Company.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required