Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April:
a. On April 1, Mathis purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225.
b. On April 1, Mathis paid freight charges of $250 cash to have the goods delivered to its warehouse.
c. On April 8, Mathis returned $800 of the merchandise which had originally cost Reece $500.
d. On April 10, Mathis paid Reece the balance due.
Prepare the journal entries to record these transactions on Reece's books. Assume that Reece uses the net method to record sales on account.
Journal entries refer to the summarized format of financial transactions that are recorded in an organization's accounting system. Journal entries provide necessary information for the preparation of financial statements.
Answer and Explanation: 1
|Apr. 1||Accounts receivable - Mathis Company||3,038||3,100 * 98%|
|Apr. 1||Cost of goods sold||2,225||...|
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fromChapter 3 / Lesson 10
Discover the meaning of a journal entry and a trial balance, types of journal entries, how a general ledger differs from a trial balance, and some examples.