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Journal Entries for Merchandise Transactions Perpetual System Webster Company was estab- lished on July 1. Its sales terms are 2/10, n/30. Credit terms for its purchases vary with the supplier. Se- tions for the first month of operations are given below. Unless noted, all transactions are on 2B lected transact nt and involve merchandise held for resale. Webster Company uses the perpetual inventory system. accou 1 Purchased goods from Dawson, Inc., $2,500; terms 1/10, n/30. 2 Purchased goods from Penn Company, $4,500; terms 2/10, n/30. 3 Paid freight on shipment from Dawson, $300. 5 Sold merchandise to Ward, Inc. $1,400 ($1,100 cost). 5 Paid freight on shipment to Ward, Inc, .$90. (Hint: debit Delivery Expense) 8 Returned $500 worth of the goods purchased July 1 from Dawson, Inc., because some July goods were damaged. Dawson approved the return. 9 Received returned goods from Ward, Inc., worth $200 ($150 cost). 10 Paid Dawson, Inc., the amount due. 10 Purchased goods from Dorn Company with a list price of $2.600. Terms 2/10, n/30. 11 Paid freight on shipment from Dorn Company, $150. 15 Received the amount due from Ward, Inc. 15 Sold merchandise to Colby Corporation, $3,200 ($2.,400 cost). 16 Mailed a check to Penn Company for the amount due on its July 2 invoice. 18 Received an allowance of $200 from Dorn Company for defective merchandise purchased on July 10. 19 Paid Dorn Company the amount due. 25 Received the amount due from Colby Corporation. Required Prepare the necessary journal entries for the Webster Company
Expert Answer
| Date | Account Title and Explanation | Debit | Credit |
| July | |||
| 1 | Inventory | $2,500 | |
| Accounts Payable | $2,500 | ||
| (Being inventory purchased) | |||
| 2 | Inventory | $4,500 | |
| Accounts Payable | $4,500 | ||
| (Being inventory purchased) | |||
| 3 | Inventory | $300 | |
| Cash | $300 | ||
| (Being freight paid in cash) | |||
| 5 | Accounts Receivable | $1,400 | |
| Sale | $1,400 | ||
| (Being sales effected) | |||
| Cost of Goods Sold | $1,100 | ||
| Inventory | $1,100 | ||
| (Being sales affected) | |||
| 5 | Delivery Expense | $90 | |
| Cash | $90 | ||
| (Being freight outward paid) | |||
| 8 | Accounts Payable | $500 | |
| Inventory | $500 | ||
| (Being purchase return done) | |||
| 9 | Sale Return and Allowances | $200 | |
| Accounts Receivable | $200 | ||
| (Being Sales return done) | |||
| Inventory | $150 | ||
| Cost of Goods Sold | $150 | ||
| (Being sale return done) | |||
| 10 | Accounts Payable | $2,000 | |
| Inventory | $20 | ||
| Cash | $1,980 | ||
| (Being payment done to supplier) | |||
| 10 | Inventory | $2,600 | |
| Accounts Payable | $2,600 | ||
| (Being inventory purchased) | |||
| 11 | Inventory | $150 | |
| Cash | $150 | ||
| (Being freight paid) | |||
| 15 | Cash | $1,200 | |
| Accounts Receivable | $1,200 | ||
| (Being cash received) | |||
| 15 | Accounts Receivable | $3,200 | |
| Sale | $3,200 | ||
| (Being sales effected) | |||
| Cost of Goods Sold | $2,400 | ||
| Inventory | $2,400 | ||
| (Being sales affected) | |||
| 16 | Accounts Payable | $4,500 | |
| Bank | $4,500 | ||
| (Being payment to supplier done) | |||
| 18 | Accounts Payable | $200 | |
| Allowance for defective merchandise | $200 | ||
| (Being allowance received) | |||
| 19 | Accounts Payable | $2,200 | |
| Inventory | $48 | ||
| Cash | $2,152 | ||
| (Being payment done to supplier) | |||
| 25 | Cash | $3,200 | |
| Accounts Receivable | $3,200 | ||
| (Being payment received) |
