The following selected transactions were completed during April between Swan Company and Bird Company:
Apr.
2. Swan Company sold merchandise on account to Bird Company, $32,000, terms FOB shipping point, 2/10, n/30. Swan Company paid freight of $330, which was added to the invoice. The cost of the merchandise sold was $19,200.
8. Swan Company sold merchandise on account to Bird Company, $49,500, terms FOB destination, 1/15, n/30. The cost of the merchandise sold was $29,700.
8. Swan Company paid freight of $710 for delivery of merchandise sold to Bird Company on April 8.
12. Bird Company paid Swan Company for purchase of April 2.
18. Swan Company paid Bird Company a refund of $2,000 for defective merchandise in the April 2 purchase. Bird Company agreed to keep the merchandise.
23. Bird Company paid Swan Company for purchase of April 8.
24. Swan Company sold merchandise on account to Bird Company, $67,350, terms FOB shipping point, n/45. The cost of the merchandise sold was $40,400.
26. Bird Company paid freight of $875 on April 24 purchase from Swan Company.
30. Swan Company granted a customer allowance (credit memo) to Bird Company for $11,300 for merchandise that was returned from the August 24 purchase. The cost of the merchandise returned was $6,500.
Instructions
Journalize the April transactions for (1) Swan Company and (2) Bird Company.
Answer:
1.
Apr. 2 Accounts Receivable—Bird Company 31,360
Sales31,360
[$32,000 – ($32,000 × 2%)]
2 Accounts Receivable—Bird Company 330
Cash330
2 Cost of Merchandise Sold 19,200
Merchandise Inventory19,200
8 Accounts Receivable—Bird Company 49,005
Sales49,005
[$49,500 – ($49,500 × 1%)]
8 Cost of Merchandise Sold 29,700
Merchandise Inventory29,700
8 Delivery Expense710
Cash710
12 Cash ($31,360 + $330)31,690
Accounts Receivable—Bird Company 31,690
18 Customer Refunds Payable 2,000
Cash2,000
23 Cash49,005
Accounts Receivable—Bird Company 49,005
24 Accounts Receivable—Bird Company 67,350
Sales67,350
24 Cost of Merchandise Sold 40,400
Merchandise Inventory40,400
30 Customer Refunds Payable 11,300
Accounts Receivable—Bird Company 11,300
30 Merchandise Inventory6,500
Estimated Returns Inventory6,500
2.
Apr. 2 Merchandise Inventory ($31,360 + $330) 31,690
Accounts Payable—Swan Company 31,690
8 Merchandise Inventory49,005
Accounts Payable—Swan Company 49,005
[$49,500 – ($49,500 × 1%)]
12 Accounts Payable—Swan Company 31,690
Cash31,690
18 Cash2,000
Merchandise Inventory2,000
23 Accounts Payable—Swan Company 49,005
Cash49,005
24 Merchandise Inventory67,350
Accounts Payable—Swan Company 67,350
26 Merchandise Inventory875
Cash875
30 Accounts Payable—Swan Company 11,300
Merchandise Inventory11,300