Solution-What is the cost of goods purchased for April

What is the cost of goods purchased for April

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Reference no: EM132480052

Question - During the month of April, Rainbow Company had the following transactions related to the purchase of merchandise inventory. Rainbow Company maintains an accounts payable subsidiary ledger.

Apr 3 Purchased $4,000 of merchandise on account from Blue Company, terms 2/10, n]30, FOB Shipping Point.

Apr 4 Rainbow paid $500 of shipping charges to Worldwide Shipping Company for the merchandise purchased on April 3 from Blue Company.

Apr 5 Blue Company agreed to reduce the purchase price of the merchandise purchased on April 3 by $300.

Apr 6 Purchased $6,000 of merchandise on account from Red Company, terms 1/15, n/30, FOB Destination. Red Company paid $800 of shipping charges to Worldwide Shipping Company.

Apr 7 Returned $1,000 of merchandise to Red Company for credit.

Apr 13 Paid Blue Company the amount due.

Apr 21 Paid Red Company the amount due.

Instructions -

(a) Prepare the general journal entries required to record the April transactions for Rainbow Company in the attached journal.

(b) Post your journal entries to the attached set of T-accounts.

Reference no: EM132480052

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What is the cost of goods purchased for April

Reference no: EM132480052

Reference no: EM132480052

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