Question

On June 10, Pais Company purchased $9,000 of merchandise from MacGyver Company, on account, terms 3/10, n/30. Pais pays the freight costs of $400 on June 11. Goods totaling $600 are returned to MacGyver for credit on June 12. On June 19, Pais Company pays McGiver Company in full, less the purchase discount. Both companies use a perpetual inventory system. Journalize perpetual inventory entries. Instructions a. Prepare separate entries for each transaction on the books of Pais Company. b. Prepare separate entries for each transaction for MacGyver Company. The merchandise purchased by Pais on June 10 cost MacGyver $5,000, and the goods returned cost McGiver $310.

Answer 1

Pais Company

June 10 Inventory 9000

Accounts payable 9000

June 11 Inventory 400

Cash 400

No entry 0

June 12 Accounts payable 600

Inventory 600

June 19 Accounts payable 8400

Inventory 252 = 8400 x 3%

Cash 8148

McGiver Company

June 10 Accounts Receivable 9000

Sales revenue 9000

Cost of goods sold 5000

Inventory 5000

June 12 Sales return and allowances 600

Accounts receivable 600

Inventory 310

Cost of goods 310

June 19 Cash 8148

Sales discount 252 =8400 x 3%

Account receivable 8400