Shore Co. sold merchandise to Blue Star Co. on account, $112,000, terms FOB shipping point, 2/10, n/30. The cost of the goods sold is $67,200. Shore paid freight of $1,800. Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due, using the net method under a perpetual inventory system. If an amount box does not require an entry, leave it blank.

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jafruevu jafruevu · Answer 1 · 2020-03-10T06:57:52+01:00

Answer:

See explanation section

Explanation:

Sales journal

A. Accounts receivable - Blue Star Co. Debit $109,760

Sales revenue credit $109,760

Note: Calculation: (112,000-(112,000 × 2%) = (112,000 - 2,240) = $109,760.

As the company used net method under a perpetual inventory system, during the sales, the company deducted the discount.

B. Cost of good sold Debit $67,200

Merchandise inventory Credit $67,200

Note: Under the perpetual inventory system, a seller has to record cost of good sold journal.

Purchase journal

Merchandise inventory Debit $109,760

Accounts payable - Shore Co. Credit $109,760

Note: Calculation: (112,000-(112,000 × 2%) = (112,000 - 2,240) = $109,760.

As the company used net method under a perpetual inventory system, during the purchase, the company got the discount.

Freight expense

Delivery expense debit $1,800

Cash credit $1,800

Note: To record shipping cost for sale.