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.

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.,...

1 answer below »

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.

Answered Same Day Dec 24, 2021

David answered on Dec 24 2021

129 Votes

SOLUTION.PDF