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Chapter 5: 19E (page 300)

Kingston Tires received the following invoice from a supplier (Fields Distribution, Inc.):

Requirements

1. Journalize the transaction required by Kingston Tires on September 23, 2018. Do not round numbers to the nearest whole dollar. Assume tires are purchased on account.

2. Journalize the return on Kingston鈥檚 books on September 28, 2018, of the D39鈥揦4 Radials, which were ordered by mistake. Do not round numbers to the nearest whole dollar.

3. Journalize the payment on October 1, 2018, to Fields Distribution, Inc. Do not round numbers to the nearest whole dollar.

Short Answer

Expert verified

The total amount paid by Kingston Tires is$769.34.

Step by step solution

01

Meaning of Invoice

An invoice refers to a commercial document prepared by the seller of goods or services. It reminds the buyer to pay the outstanding amount against the purchases made. This document contains essential details associated with thepayment term, price of goods, quantity, and many more.

02

Journalizing the transaction required by Kingston Tires

Date

Accounts and Explanation

Debit ($)

Credit ($)

2018

Sept 23

Merchandise Inventory

929.60

Accounts payable

929.60

(To record the purchase of inventory)

03

Step 3:Journalizing the return on Kingston’s books

Date

Accounts and Explanation

Debit ($)

Credit ($)

2018

Sept 28

Accounts payable

152.48

Merchandise inventory

152.48

(To record the return of inventory)

04

Journalizing the payment transaction

Date

Accounts and Explanation

Debit ($)

Credit ($)

2018

Oct 1

Accounts payable (929.60-152.48)

777.12

Cash (777.12-1%*777.12)

769.34

Merchandise inventory

7.77

(To record the payment)

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Most popular questions from this chapter

What is a purchase return? How does a purchase allowance differ from a purchase return?

Journalize the following sales transactions for Sierra Tractors. Explanations are not required.

June 5 Sierra sold \(20,000 of inventory on account, credit terms are 4/10, n/30. Cost of goods is \)10,000. Sierra uses the gross method to record sales revenue.

12 Sierra receives payment from the customer on the amount due, less the discount.

Crazy Cookies earned net sales revenue of \(66,000,000 in 2018. The cost of goods sold was \)39,600,000, and net income reached $7,000,000, the company鈥檚 highest ever. Compute the company鈥檚 gross profit percentage for 2018.

Suppose Piranha.com sells 3,500 books on account for \(17 each (cost of these books is \)35,700) on October 10, 2018 to The Textbook Store. One hundred of these books (cost $1,020) were damaged in shipment, so Piranha.com later received the damaged goods from The Textbook Store as sales returns on October 13, 2018.

Requirements

1. Journalize The Textbook Store鈥檚 October 2018 transactions.

2. Journalize Piranha.com鈥檚 October 2018 transactions. The company estimates sales returns at the end of each month.

Click Computers has the following transactions related to the sale of merchandise inventory.

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Journalize the transactions for Click Computers assuming that the company uses the perpetual inventory system.
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