Question

The Malvado Corporation sells goods on terms of 2/10, n/30. Credit terms for its purchases vary with the supplier. Selected transactions for August are given below. Unless noted, all transactions are on account and involve merchandise held for resale. The periodic inventory system is used.

Required

Aug.

1

Purchased merchandise from Norris, Inc., $2,500; terms 2/10, n/30.

 

5

Paid freight on shipment from Norris, Inc., $120.

 

7

Sold merchandise to Denton Corporation, $3,100.

 

7

Paid freight on shipment to Denton Corporation, $150, and billed Denton for the charges.

 

9

Returned $400 worth of the merchandise purchased August 1 from Norris, Inc., because it was defective. Norris approved the return.

 

9

Received $500 of returned merchandise from Denton Corporation.

 

10

Paid Norris, Inc., the amount due.

 

14

Purchased from Chambers, Inc., goods with a price of $4,500. Terms 1/10, n/30.

 

15

Paid freight on shipment from Chambers, Inc., $160.

 

17

Received the amount due from Denton Corporation.

 

18

Sold merchandise to Weber, Inc., $4,800.

 

20

Paid freight on August 18 shipment to Weber, Inc., $160 and billed Weber.

 

24

Paid Chambers, Inc., the amount due.

 

28

Received the amount due from Weber, Inc.

GENERAL JOURNAL Date Description Debit Credit Aug. 1 Purchases from Norris, Inc., 2/10, n/30 Paid freight on Norris, Inc, shipment. 7 Sales to Denton Corporation. 7 Paid freight on shipment to Denton Corporation and billed Denton Returned goods to Norris, Inc. Issued credit memo to Denton for goods returned 10 Cash Paid Norris, Inc., the amount due.