Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses perpetual inventory. Use a General Journal to journalize the following three transactions during the month of May:
| (a) | On May 4th, Bargain Wholesalers sells inventory to Pet World Supplies for $8,250.00 with terms 1/10, n/30. The cost of the merchandise is $5,755.00. | |
| (b) | On May 13th, Bargain Wholesalers sells an additional $10,985 in inventory to Pet World Supplies with terms 1/10, n/30. The cost of the merchandise is $6,925.00. | |
| (c) | On May 23rd, Bargain Wholesalers receives a check from Pet World Supplies paying the balance due. | |
Darshita Changed status to publish February 17, 2020
Answer:
| Date: | Account Title | Debit: | Credit: |
| May-04 | A/R – Pet World Supplies | 8250 | |
| Sales | 8250 | ||
| Cost of Merchandise Sold | 5755 | ||
| Merchandise Inventory | 5755 | ||
| May-13 | A/R – Pet World Supplies | 10985 | |
| Sales | 10985 | ||
| Cost of Merchandise Sold | 6925 | ||
| Merchandise Inventory | 6925 | ||
| May-23 | Cash | 19125.15 | |
| Sales Discounts | 109.85 | ||
| A/R – Pet World Supplies | 19235 |
Working for the answer
Computation of payment:
| Sale on May 4th: – Discount period expired | $8,250.00 | |
| Sale on May 13th: | $10,985.00 | |
| Discount – 1% of balance: | 109.85 | |
| Amount due on May 13th sales | 10,875.15 | |
| Cash paid: | $19,125.15 |
Darshita Changed status to publish February 17, 2020
