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The following selected transactions were completed by Niles Co. during March of the current year:

Mar. 1 Purchased merchandise from Haas Co., $43,250, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $650 was added to the invoice.
5 Purchased merchandise from Whitman Co., $19,175, terms FOB destination, n/30.
10 Paid Haas Co. for invoice of March 1.
13 Purchased merchandise from Jost Co., $15,550, terms FOB destination, 2/10, n/30.
14 Issued debit memo to Jost Co. for $3,750 of merchandise returned from purchase on March 13.
18 Purchased merchandise from Fairhurst Company, $13,560, terms FOB shipping point, n/eom.
18 Paid freight of $140 on March 18 purchase from Fairhurst Company.
19 Purchased merchandise from Bickle Co., $6,500, terms FOB destination, 2/10, n/30.
23 Paid Jost Co. for invoice of March 13, less debit memo of March 14.
29 Paid Bickle Co. for invoice of March 19.
31 Paid Fairhurst Company for invoice of March 18.
31
Paid Whitman Co. for invoice of March 5.

Journalize the entries to record the transactions of Niles Co. for March. Refer to the Chart of Accounts for exact wording of account titles.

Respuesta :

letmeanswer

Solution:

Calculate the amount of accounts payable.

Purchases = $43,250

Discount percentage = 2%

Freight charges = $650  

Amount of accounts payable = [(Purchases — Discount) + Freight] = [Purchases — (Purchases x 2%) + Freight]

= [$43,250— ($43, 250 x 2%) + $650] (1)

= $43,250 — $865 + $650

= $43,035  

Merchandise Inventory is an asset and it is increased by $43,035. Therefore, the debit Merchandise Inventory account with $43,035.

• Accounts payable is a liability and it is increased by $43,035.

Therefore, credit accounts payable account with $43,035.  

Record the journal entry of Company N.  

Date     Account Title & Explanation    Post Ref.   Debit ($)   Credit ($)

5th Mar    Merchandise Inventory                            19,175

                  Accounts payable                                                      19,175                

        (To record purchase on account)  

Table (2)  

Merchandise Inventory is an asset and it is increased by $19,175.

Therefore, debit Merchandise Inventory account with $19,175.

• Accounts payable is a liability and it is increased by $19,175.

Therefore, credit accounts payable account with $19,175.  

Record the journal entry of Company N.  

Date     Account Title&Explanation    Post Ref.   Debit ($)   Credit ($)

March 10      Accounts payable                            43,035

                              Cash                                                           43,035

(To record the payment against accounts payable)  

Table (3)  

• Accounts payable is a liability and it is decreased by $43,035. Therefore, debit accounts payable account with $43,035.

• Cash is an asset and it is decreased by $43,035. Therefore, credit cash account with $43,035.  

Record the journal entry of Company N.  

Date      Account Title&Explanation   Post Ref.   Debit ($)   Credit ($)

March 13    Merchandise Inventory                       15,239

                   Accounts payable                                                15,239 (2)

        (To record purchase on account)  

Table (4)  

Calculate the amount of accounts payable.

Purchases = $15,550

Discount percentage = 2%  

Amount of accounts payable = (Purchases — Discount) = Purchases — (Purchacss x 2%)

= $15,550 - ($15,550 x 2%) (2)

= $15,550 - $311

= $15, 239  

Merchandise Inventory is an asset and it is increased by $15,239. Therefore, debit Merchandise Inventory account with 315,239.

• Accounts payable is a liability and it is increased by $15,239.

Therefore, credit accounts payable accounts with $15,239.  

Record the journal entry of Company N.  

Date   Account Title & Explanation    Post Ref.   Debit ($)   Credit ($)

Mar14       Accounts payable                                  3,675 (3)

             Merchandise Inventory                                                3,675

          (To record purchase return)  

Table (5)

Calculate the amount of accounts payable.

Purchases return = $3,750

Discount percentage = 2%  

Amount of accounts payable = (Purchases return — Discount) =Purchases return — (Purchases return x 2%)

= $3,750 - ($3, 750 x 2%)

= $3,750 - $75

= $3,675  (3)  

• Accounts payable is a liability and it is decreased by $3,675.

Therefore, debit accounts payable account with $3,675.

• Merchandise Inventory is an asset and it is decreased by $3,675. Therefore, credit Merchandise Inventory account with $3,675.  

Record the journal entry of Company N  

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