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The following transactions were completed by Montrose Company during May of the current year. Montrose Company uses a perpetual inventory system May 3 Purchased merchandise on account from Floyd

The following transactions were completed by Montrose Company during May of the current year. Montrose Company uses a perpetual inventory system.

May

3

Purchased merchandise on account from Floyd Co., $4,000, terms FOB

 

 

Shipping

   

point, 2/10, n/30, with prepaid transportation costs of $120 added to the

   

invoice.

 

5

Purchased merchandise on account from Kramer Co., $8,500, terms FOB

 

 

destination,

   

1/10, n/30.

 

6

Sold merchandise on account to C. F. Howell Co., list price $4,000, trade

 

 

Discount

   

30%, terms 2/10, n/30. The cost of the merchandise sold was $1,125.

 

8

Purchased office supplies for cash, $150.

 

10

Returned merchandise purchased on May 5 from Kramer Co., $1,300.

 

13

Paid Floyd Co. on account for purchase of May 3, less discount.

 

14

Purchased merchandise for cash, $10,500.

 

15

Paid Kramer Co. on account for purchase of May 5, less return of May 10

   

and discount.

 

16

Received cash on account from sale of May 6 to C. F. Howell Co., less

 

 

discount.

 

19

Sold merchandise on account to Comer Co., $3,480, terms 2/10, n/30. The

   

cost of the merchandise sold was $1,400.

 

22

Sold merchandise for cash, $4,350. The cost of the merchandise sold was

 

 

$1,750.

 

25

Received merchandise returned by Comer Co. from sale on May 22, $1,480.

   

The cost of the returned merchandise was $600.

 

31

Paid a service processing fee of $140 for MasterCard sales.

Instructions

1. Journalize the preceding transactions.

2. Journalize the adjusting entry for merchandise inventory shrinkage, $3,750.

Jul 01 2020 View more View Less

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