Question

PERIODIC SALES "BE5.18 ( LO 7) AP Video

Prepare the journal entries to record these transactions on NW Wholesale Company's books. NW Wholesale Company uses a periodic inventory system.
Feb. NW Wholesale sells $12,000 of merchandise to Allied Company, terms 2/10,n/30,FOB
5 shipping point.
6 The correct company paid freight costs of $110.
8 Allied returned $1,000 of the merchandise purchased on February 5 . The inventory is not damaged and can be resold. NW Wholesale restores it to inventory.
11 NW Wholesale collects the balance due from Allied.

Answer 1

To record the transactions on NW Wholesale Company's books, journal entries need to be made. Debit accounts such as Accounts Receivable and Inventory, and credit accounts like Sales Revenue and Cost of Goods Sold.

Step-by-step explanation:

To record these transactions on NW Wholesale Company's books, the following journal entries need to be made:

1. Feb. NW Wholesale sells $12,000 of merchandise to Allied Company:

• Debit: Accounts Receivable ($12,000)
• Credit: Sales Revenue ($12,000)

6 The correct company paid freight costs of $110:

• Debit: Freight Out ($110)
• Credit: Cash ($110)

8 Allied returned $1,000 of the merchandise purchased on February 5:

• Debit: Sales Returns and Allowances ($1,000)
• Credit: Accounts Receivable ($1,000)

Restatement of inventory:

• Debit: Inventory ($1,000)
• Credit: Cost of Goods Sold ($1,000)

11 NW Wholesale collects the balance due from Allied:

• Debit: Cash ($11,700)
• Credit: Accounts Receivable ($11,700)