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On June 10, Lipizzaner Crab Shack purchased $6,000 of merchandise from Bristol Company FOB shipping point, terms 2/10, n/30. Lipizzaner pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Bristol for credit on June 12. The scrap value of these goods is $150. On June 19, Lipizzaner pays Bristol Company in full, less the purchase discount. Both companies use a perpetual inventory system.
Instructions
(a) Prepare separate entries for each transaction on the books of Lipizzaner.
(b) Prepare separate entries for each transaction for Bristol Company. The merchandise purchased by Lipizzaner on June 10 had cost Bristol $3,000.
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