Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts.
On July 1, Roley purchased $60,000 of inventory, terms 2/10, n/30, f.o.b. shipping point. Roley paid freight costs of $1,200. On July 3, Roley returned damaged goods and received a credit of $6,000. On July 10, Roley paid for the goods.
Prepare all necessary journal entries for Roley.
07/01
|
Purchases.............................
|
60,000
| |
Accounts Payable.................
|
60,000
| ||
Freight-in............................
|
1,200
| ||
Cash......................... Cash
|
1,200
| ||
07/03
|
Accounts Payable......................
|
6,000
| |
Purchase Returns and Allowances..
|
6,000
| ||
07/10
|
Accounts Payable......................
|
54,000
| |
Cash.............................
|
52,920
| ||
Purchase Discounts...............
|
1,080
|
