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29 January, 22:54

During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $4,100 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $1,100 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,000 with terms 2/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. Required: Prepare journal entries to record the transactions, assuming Ace records discounts using the gross method in a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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Answers (1)
  1. 30 January, 00:52
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    Answer and Explanation:

    The journal entries are shown below:

    On June 3

    Merchandise Inventory $4,100

    To Accounts payable $4,100

    (Being the purchase of goods on credit is recorded)

    On Jun 5

    Accounts payable $1,100

    To Merchandise Inventory $1,100

    (To record purchase returns)

    On June 6

    Merchandise Inventory $1,000

    Accounts payable $1,000

    (Being the purchase of goods on credit is recorded)

    On June 11

    Accounts payable ($4,100 - $1,100) $3,000

    To Cash $2,960

    To Inventory ($4,100 - $1,100) * 2% $60

    (Being the payment is recorded)

    On June 22

    Accounts Payable $2,000 ($3,000 - $1,000)

    To Cash $2,000

    (Being the payment on account in full is paid)
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Home » Business » During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $4,100 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $1,100 to Diamond Inc.
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