Reference no: EM132530854
Question - On May 11, 2020, Wilson Purchasing purchased $22,500 of merchandise from Happy Sales; terms 3/10, n/90, FOB Happy Sales. The cost of the goods to Happy was $17,500. Wilson paid $1,250 to Express Shipping Service for the delivery charges on the merchandise on May 11. On May 12, Wilson returned $3,500 of goods to Happy Sales, which restored them to inventory. The returned goods had cost Happy $2,700. On May 20, Wilson mailed a cheque to Happy for the amount owed on that date. Happy received and recorded the cheque on May 21.
A. Present the journal entries that Wilson Purchasing should record for these transactions. Assume that Wilson uses a perpetual inventory system.
Record the purchase of merchandise on credit; terms 3/10, n/90.
Record the payment of shipping charges on purchased merchandise.
Record the return of unacceptable merchandise.
Record the payment of balance within the discount period.
B. Present the journal entries that Happy Sales should record for these transactions. Assume that Happy uses a perpetual inventory system.
Record sale of merchandise on account; 3/10, n/90.
Record cost of sale.
Record the entry for accepting a return from a customer.
Record the cost of returned goods.
Record the entry for receipt of balance within the discount period.