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Bushard Company (buyer) and Schmidt, Inc. (seller) engaged in the following transactions during February 2019:

Bushard Company
DATE TRANSACTIONS
2019
Feb. 10 Purchased merchandise for $5,000 from Schmidt, Inc., Invoice 1980, terms 1/10, n/30.
13 Received Credit Memorandum 230 from Schmidt, Inc., for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1980, dated February 10.
19 Paid amount due to Schmidt, Inc., for Invoice 1980 of February 10, less the return of February 13 and less the cash discount, Check 2010. Schmidt, Inc.

DATE TRANSACTIONS
2019
Feb. 10 Sold merchandise for $5,000 on account to Bushard Company, Invoice 1980, terms 1/10, n/30.
13 Issued Credit Memorandum 230 to Bushard Company for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1980, dated February 10.
19 Received payment from Bushard Company for Invoice 1980 of February 10, less the return of February 13 and less the cash discount, Check 2010.

Required:
Journalize the transactions above in a general journal for both Bushard Company and Schmidt, Inc.

Sagot :

Anthougoidn

Answer:

Bushard Company (buyer) and Schmidt, Inc. (seller)

Journal Entries:

Bushard Company

Feb. 10 Debit Inventory $5,000

Credit Accounts payable (Schmidt, Inc.) $5,000

To record the purchase of goods on account, via Invoice 1980, terms 1/10, n/30.

13 Debit Accounts payable (Schmidt, Inc.) $200

Credit Inventory $200

To record the return of damaged goods and received Credit Memorandum 230.

19 Debit Accounts payable (Schmidt, Inc.) $4,800

Credit Cash $4,752

Credit Cash Discounts $48

To record the payment on account and discounts.

Schmidt, Inc.

Feb. 10 Debit Accounts receivable (Bushard Company) $5,000

Credit Sales revenue $5,000

To record the sale of goods on account, Invoice 1980, terms 1/10, n/30.

13 Debit Sales returns $200

Credit Accounts receivable (Bushard Company) $200

To record the return of damaged, issuing Credit Memorandum 230.

19 Debit Cash $4,752

Debit Cash Discounts $48

Credit Accounts receivable (Bushard Company) $4,800

To record the receipt of cash from customer, including discounts.

Explanation:

a) Data and Analysis:

Bushard Company

Feb. 10 Inventory $5,000 Accounts payable (Schmidt, Inc.) $5,000, Invoice 1980, terms 1/10, n/30.

13 Accounts payable (Schmidt, Inc.) $200 Inventory $200  Credit Memorandum 230, damaged merchandise.

19 Accounts payable (Schmidt, Inc.) $4,800 Cash $4,752 Cash Discounts $48

Schmidt, Inc.

Feb. 10 Accounts receivable (Bushard Company) $5,000 Sales revenue $5,000, Invoice 1980, terms 1/10, n/30.

13 Sales returns $200 Accounts receivable (Bushard Company) $200  Credit Memorandum 230, damaged merchandise.

19 Cash $4,752 Cash Discounts $48 Accounts receivable (Bushard Company) $4,800

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