Posted: November 28th, 2015

Bixby Co Case

Question

The Bixby Co. had the following transactions involving the purchase of merchandise. Prepare the necessary general journal entries. Any applicable freight costs are prepaid by the seller. The perpetual inventory method is in use.

June 16  Purchased merchandise having a price of $6,000 from the Shelby Manufacturing Co. on account with credit terms 2/10, n/30. Transportation terms F.O.B destination.

June 16   Purchased merchandise having a price of $9,000 from the Ajax Supply House on account with credit terms 2/10, n/30. Transportation terms F.O.B shipping point. The freight costs were $175.

June 17    Received the goods from Shelby.

June 17    Received the goods from Ajax.

June 20   Returned for credit merchandise with an invoice price of $800 to Ajax.

June 25    Paid Shelby the amount owed.

June 28    Paid Ajax the amount owed.

June 30     Returned for cash, merchandise with an invoice price of $400 to Shelby.

 

Prepare the necessary general journal entry for June 16, Purchased merchandise having a price of $6,000 from the Shelby Manufacturing Co. on account with credit terms 2/10, n/30. Transportation terms F.O.B destination.

Prepare the necessary general journal entry for June 17, Received the goods from Shelby.

Prepare the necessary general journal entry for June 25.

Prepare the necessary general journal entry for June 28.

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