Question

Merchandise purchase transactions-perpetual L03 Journalize each of the following transactions assuming a perpetual inventory system. May 1 Purchased $1,200 of merchandise inventory: terms 1/10,n/30. 14 Paid for the May 1 purchase. 15 Purchased $3.000 of merchandise inventory; terms 2/15,n/30. 30 Paid for the May 15 purchase, less the applicable discount.

Answer 1

Journal entries for merchandise purchase transactions under a perpetual inventory system include recording inventory purchases and payments, including any applicable discounts.

Step-by-step explanation:

The student's question pertains to journalizing merchandise purchase transactions using a perpetual inventory system. The perpetual inventory system continuously updates the balance of merchandise inventory with each transaction. Below are the journal entries for the given transactions:

• May 1: Purchased $1,200 of merchandise inventory. Journal Entry: Debit Merchandise Inventory $1,200; Credit Accounts Payable $1,200.
• May 14: Paid for the May 1 purchase. Journal Entry: Debit Accounts Payable $1,200; Credit Cash $1,200.
• May 15: Purchased $3,000 of merchandise inventory. Journal Entry: Debit Merchandise Inventory $3,000; Credit Accounts Payable $3,000.
• May 30: Paid for the May 15 purchase, less the 2% discount ($60 discount). Journal Entry: Debit Accounts Payable $3,000; Credit Cash $2,940; Credit Merchandise Inventory $60.

These entries ensure the merchandise balance and current account balance reflect the ongoing inventory status and the effect of discounts on payments.