Question

The following selected transactions were completed by Betz Company during July of the current year:

July1Purchased merchandise from Sabol Imports Co., $13,725, terms FOB destination, n/30.3Purchased merchandise from Saxon Co., $10,550, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $205 was added to the invoice.5Purchased merchandise from Schnee Co., $12,800, terms FOB destination, 2/10, n/30.6Issued debit memo to Schnee Co. for merchandise with an invoice amount of $4,550 returned from purchase on July 5.13Paid Saxon Co. for invoice of July 3.14Paid Schnee Co. for invoice of July 5, less debit memo of July 6.19Purchased merchandise from Southmont Co., $29,160, terms FOB shipping point, n/eom.19Paid freight of $425 on July 19 purchase from Southmont Co.20Purchased merchandise from Stevens Co., $22,400, terms FOB destination, 1/10, n/30.30Paid Stevens Co. for invoice of July 20.31Paid Sabol Imports Co. for invoice of July 1.31Paid Southmont Co. for invoice of July 19.
Required:
Journalize the entries to record the transactions of Betz Company for July.

Answer 1

1. Betz Company journal entries for July include purchases, payments, and returns with accurate debits and credits.

2. The entries follow double-entry accounting principles, ensuring a balanced representation of financial transactions.

Step-by-step explanation:

In July, Betz Company engaged in various transactions involving the purchase and payment of merchandise. The journal entries above reflect these transactions. For instance, on July 1, Betz Company purchased merchandise from Sabol Imports Co. on credit. The journal entry debits Merchandise Inventory and credits Accounts Payable for the transaction amount of $13,725.

Similarly, on July 3, Betz Company purchased merchandise from Saxon Co. with terms FOB shipping point, 2/10, n/eom. The journal entry includes debiting Merchandise Inventory and Prepaid Freight, and crediting Accounts Payable. The prepaid freight of $205 is added to the invoice amount.

Throughout the month, similar transactions are recorded, including payments to suppliers and the return of merchandise. Each entry follows the double-entry accounting system, ensuring that debits equal credits to maintain the accounting equation's balance. This meticulous recording of transactions provides an accurate representation of Betz Company's financial activities during July.