Show Me How Transactions for Buyer and Seler Shore Co sold m

Show Me How Transactions for Buyer and Seler Shore Co. sold merchandise to Biue Star Co. on account, $111,100, terms FOB shipping point, 2/10, n/30. The cost of the goods sold is $66,660. Shore pai reight of $2,000 lounalize Shore Co.\'s entry for the sale, purchase, and payment of amount due. ournaline ue Star Co\'s entry for the sale, purchase, and payment of amount due 8

Solution

BOOKS OF SHORE CO: Accounts receivable 111100 Sales revenue 111100 (To record sale) Cost of goods sold 66660 Merchandise inventory 66660 (To record cost of goods sold) Accounts receivable 2000 Cash 2000 (To record payment of freight on Star Co\'s account) Note: As the term of sale is FOR Shipping point, the freight is to be borne by the purchaser. Cash (111100*98%+2000) 110878 Sales discounts 2222 Accounts receivable 113100 (To record receipt of cash against receivable) BOOKS OF BLUE STAR CO: Merchandise inventory 111100 Accounts payable 111100 (To record purchase) Merchandise inventory 2000 Accounts payable 2000 (To record payment of freight by Shore Co) Accounts payable 113100 Merchandise inventory 2222 Cash 110878 (To record payment against purchase) Note: It is presumed that Blue Star Co has perpetual inventory system.