On May 15, Monique Company purchased $40,000 of merchandise from the Terrell Company, with terms of 1/10, n/30. On May 17, Monique paid $310 to Swift Trucking Company for freight on the shipment. On May 20, Monique Company returned $800 of merchandise for credit. Final payment was made to Terrell on May 24. Monique Company records purchases using the perpetual inventory system.

Required: Prepare the journal entries that Monique Company should make on May 15, 17, 20, and 24.

Question

Business

Boomer

3 April, 06:46

On May 15, Monique Company purchased $40,000 of merchandise from the Terrell Company, with terms of 1/10, n/30. On May 17, Monique paid $310 to Swift Trucking Company for freight on the shipment. On May 20, Monique Company returned $800 of merchandise for credit. Final payment was made to Terrell on May 24. Monique Company records purchases using the perpetual inventory system.

Required: Prepare the journal entries that Monique Company should make on May 15, 17, 20, and 24.

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Keith Livingston · Answer 1

May-15. Dr Merchandise inventory 40000

Cr Accounts payable 40000

(To record purchase of inventory)

May-17. Dr Merchandise inventory 310

Cash 310

(To record payment of freight of shipment)

May-20. Dr Accounts payable 800

Cr Merchandise inventory 800

(To record purchase return of inventory)

May-24. Dr Accounts payable (40000-800) 39200

Cr Cash 39200

(To record payment in full of inventory purchase)