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E5-4 On June 10, Rebecca Company purchased $7,600

Price: $1.99


E5-4 On June 10, Rebecca Company purchased $7,600 of merchandise from Clinton
Company, FOB shipping point, terms 2/10, n/30. Rebecca pays the freight costs of $400 on
June 11. Damaged goods totaling $300 are returned to Clinton for credit on June 12. The
fair value of these goods is $70. On June 19, Rebecca pays Clinton Company in full, less
the purchase discount. Both companies use a perpetual inventory system.

Instructions
(a) Prepare separate entries for each transaction on the books of Rebecca Company.
(b) Prepare separate entries for each transaction for Clinton Company. The merchandise
purchased by Rebecca on June 10 had cost Clinton $4,300.

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