Question

Parker Company uses the gross method to account for purchase discounts and the periodic inventory system.

November 7: Purchased goods from Thompson Company on account, exist17,000, terms 1/10, n/30.
November 13: Returned merchandise to Thompson Company that was previously purchased on account, $2,400.
November 15: Paid the amount due to Thompson Company.

Required:
Journalize Jackson Company's transactions on November 7, November 13, and November 15.

Answer 1

Step-by-step explanation:

The journal entries are shown below:

On November 7

Purchase A/c Dr $17,000

To Account payable A/c $17,000

(Being the goods are purchased on credit)

On November 13

Accounts Payable A/c Dr $2,400

To Purchase Returns A/c $2,400

(Being returned goods are recorded)

On November 15

The journal entries are shown below:

On November 7

Purchase A/c Dr $17,000

To Account payable A/c $17,000

(Being the goods are purchased on credit)

On November 13

Accounts Payable A/c Dr $2,400

To Purchase Returns A/c $2,400

(Being returned goods are recorded)

On November 15

Account payable A/c Dr $14,600 ($17,000 - $2,400)

To Purchase Discount A/c Dr $146 ($14,600 × 1%)

To Cash A/c $14,454

(Being the amount paid within the discount period)