Question

Blossom Co. records purchases at net amounts and uses periodic inventories. Prepare entries for the following: (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) June 11 Purchased merchandise on account, $19,000, terms 2/10, n/30. 15 Returned part of June 11 purchase, $750, and received credit on account. 30 Prepared the adjusting entry required for financial statements.

Answer 1

See the explanation below

Step-by-step explanation:

Blossom Co. Journal Entries

Date Details DR ($) CR ($)

June 11 Purchases 19,000

Accounts payable 19,000

Being the purchase of merchandise on account

June 15 Account payable 750

Return outward 750

Being the return of a part of the merchandise purchased

Note:

Blossom Co. returned the goods within 10 days, the full amount of the good returned will be charged to the accounts receivable.

Also, assuming that Blossom Co. within 10 days, it will enjoy 2% discount on the outstanding accounts payable and this will be calculated and recorded as follows:

Cash paid within 10 days = (19,000 - 750) × 98% = 17,885

Date Details DR ($) CR ($)

Account payable 17,885

Cash 17,885

Being cash paid for the merchandise purchased

However, if it pays after 10 days, the transactions will be as follows:

Cash paid after 10 days but on or before 30th day = 19,000 - 750 = 17,885

Date Details DR ($) CR ($)

Account payable 18,250

Cash 18,250

Being cash paid for the merchandise purchased