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• Prepare journal entries to record the following merchandising transactions of Flora Company, which applies the perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—Arch.) (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) July 1 Purchased merchandise from Arch Company for $6,700 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. Date General Journal Debit Credit July 1 July 2 Sold merchandise to Driver Co. for $1,000 under credit terms of 3/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $558. Date General Journal Debit Credit July 2 July 2 July 3 Paid $140 cash for freight charges on the purchase of July 1. Date General Journal Debit Credit July 3 July 8 Sold merchandise that had cost $2,000 for $2,400 cash. Date General Journal Debit Credit July 8 July 8 July 9 Purchased merchandise from Kew Co. for $2,450 under credit terms of 3/15, n/60, FOB destination, invoice dated July 9. Date General Journal Debit Credit July 9 July 11 Received a $450 credit memorandum from Kew Co. for the return of part of the merchandise purchased on July 9. Date General Journal Debit Credit July 11 July 12 Received the balance due from Driver Co. for the invoice dated July 2, net of the discount. Date General Journal Debit Credit July 12 July 16 Paid the balance due to Arch Company within the discount period. Date General Journal Debit Credit July 16 July 19 Sold merchandise that cost $800 to Surtis Co. for $1,200 under credit terms of 3/15, n/60, FOB shipping point, invoice dated July 19. Date General Journal Debit Credit July 19 July 19 July 21 Issued a $200 credit memorandum to Surtis Co. for an allowance on goods sold on July 19. Date General Journal Debit Credit July 21 July 24 Paid Kew Co. the balance due after deducting the discount. Date General Journal Debit Credit July 24 July 30 Received the balance due from Surtis Co. for the invoice dated July 19, net of discount. Date General Journal Debit Credit July 30 July 31 Sold merchandise that cost $5,500 to Driver Co. for $7,000 under credit terms of 3/10, n/60, FOB shipping point, invoice dated July 31. Date General Journal Debit Credit July 31 July 31

• Answer:

  July 1 Purchased merchandise from Arch Company for $6,700 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1. Dr Merchandise inventory (MI) $6,700 Cr Accounts payable (AP) - Arch $6,700 July 2 Sold merchandise to Driver Co. for $1,000 under credit terms of 3/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $558. Dr Accounts receivable (AR) - Driver $1,000 Cr Sales $1,000 Dr COGS $558 Cr MI $558 July 3 Paid $140 cash for freight charges on the purchase of July 1. Dr MI $140 Cr Cash $140 July 8 Sold merchandise that had cost $2,000 for $2,400 cash. Dr Cash $2,400 Cr Sales $2,400 Dr COGS $2,000 Cr MI $2,000 July 9 Purchased merchandise from Kew Co. for $2,450 under credit terms of 3/15, n/60, FOB destination, invoice dated July 9. (assuming the goods were received) Dr MI $2,450 Cr AP - Kew $2,450 July 11 Received a $450 credit memorandum from Kew Co. for the return of part of the merchandise purchased on July 9. Dr AP - Kew $450 Cr MI $450 July 12 Received the balance due from Driver Co. for the invoice dated July 2, net of the discount. Dr Cash $970 Dr Sales discounts $30 Cr AR - Driver $1,000 July 16 Paid the balance due to Arch Company within the discount period. Dr AP - Arch $6,700 Cr Cash $6,633 Cr MI $67 July 19 Sold merchandise that cost $800 to Surtis Co. for $1,200 under credit terms of 3/15, n/60, FOB shipping point, invoice dated July 19. Dr AR - Surtis $1,200 Cr Sales $1,200 Dr COGS $800 Cr MI $800 July 21 Issued a $200 credit memorandum to Surtis Co. for an allowance on goods sold on July 19. Dr Sales returns and allowances $200 Cr AR - Surtis $200 July 24 Paid Kew Co. the balance due after deducting the discount. Dr AP - Kew $2,000 Cr Cash $1,940 Cr MI $60 July 30 Received the balance due from Surtis Co. for the invoice dated July 19, net of discount. Dr Cash $970 Dr Sales discounts $30 Cr AR - Surtis $1,000 July 31 Sold merchandise that cost $5,500 to Driver Co. for $7,000 under credit terms of 3/10, n/60, FOB shipping point, invoice dated July 31. Dr AR - Driver $7,000 Cr Sales $7,000 Dr COGS $5,500 Cr MI $5,500