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Sample Problem

Sample Problem. Chapter 8. Transaction 1. Purchased merchandise for $3,000; the terms are 2/10, n/30. This transaction will be recorded in the purchases journal.

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Sample Problem

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  1. Sample Problem Chapter 8

  2. Transaction 1 • Purchased merchandise for $3,000; the terms are 2/10, n/30. This transaction will be recorded in the purchases journal. *Note: the terms 2/10, n/30 mean that if the invoice is paid within 10 days of the date there will be a 2% discount; otherwise, the total amount is due in 30 days.

  3. Transaction 2 • Returned damaged merchandise to a supplier and received a credit memorandum for $800. This transaction will be recorded in the general journal. It will be a debit to Accounts Payable and a credit to Purchase Returns and Allowances.

  4. Transaction 3 • Issued a check for $3,600 to a supplier as payment on account. This will be recorded in the Cash Payments Journal. The entry will be a debit to Accounts Payable and a credit to Cash.

  5. Transaction 4 • Purchased merchandise for $2,000 plus a freight charge of $140; the supplier’s invoice is payable in 30 days. This entry will be recorded in the Purchases Journal as a debit to purchases ($2,000), a debit to freight in ($140) and a credit to Accounts Payable ($2,140).

  6. Transaction 5 • Received an allowance for merchandise that was damaged but can be sold at a reduced price; the supplier’s credit memorandum is for $475. This entry will be recorded in the General Journal. The entry will be a debit to Accounts Payable and a credit to Purchase Returns and Allowances.

  7. Transaction 6 • Purchased merchandise for $3,500 in cash. This entry will be recorded in the Cash Payments Journal with a debit to Purchases and a credit to Cash.

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