Accounting 280 Chapter 6 Quiz 2 Phillips Co is an office sup

Accounting 280 Chapter 6 Quiz 2. Phillips Co. is an office supply store. The company uses a perpetual inventory system, records purchases at net cost, and records sales revenue at full invoice price. Record the following transactions in the company\'s general journal. To conserve space, you may omit the written explanations which normally should accompany the entries. July 1 Purchased four Lorac copying machines on account from Lorac Corp. Total invoice price was $2,500 per machine ($10,000 total); terms of 2/10, n/30. These machines are 3 Found one of the Lorac copiers to be defective and returned it to Lorac, thus reducing the 9 Sold one of the Lorac copiers to Morris Realty. The sales price was $3,500, terms 2/10, intended for resale. amount owed n/60 10 Paid the remaining amount owned to Lorac Corp., less the allowable discount. 19 Received full payment from Morris, less the allowable discount. Date General Journal

Solution

Journal entries: Date Accounts title and explanation Debit $ Credit $ 1-Jul Inventory Account Dr. 10000       Accounts payable 10000 3-Jul Accounts payable Account Dr. 2500      Inventory Account 2500 9-Jul Accounts receivable Account Dr. 3500       Sales revenue 3500 Cost of Goods sold Account Dr. 2500       Inventory 2500 10-Jul Accounts payable Account Dr. 7500       Inventory (7500*2%) 150        Cash account 7350 19-Jul Cash Account Dr. 3430 Sales discount Dr. (3500*2%) 70       Accounts receivable 3500