11 Journalize the following transactions in june 4 Willem Co

#11 Journalize the following transactions in june

4       Willem Corporation purchased $4,000 worth of merchandise, terms 2/10, n/30 from Cate Corporation. The cost of the merchandise to Cate was $2,600.

10       Willem returned $700 worth of goods to Cate for full credit. The goods had a cost of $450 to Cate and were placed back into inventory

26       Willem paid the account.

Solution

Ans ) Journal entries are as follows: In the Books of Willem Corporation Sl No. Date Particulars Debit Amount($) Credit Amount($) 1 04-Jun Purchases A/c Dr                          4,000 To Cate Corporation A/c                          4,000 (Being merchandise purchased on credit) 2 10-Jun Cate Corporaton A/c Dr                             700 To Purchase Return A/c                              700 (Being goods returned of $700) 3 26-Jun Cate Corporation A/c Dr                          3,300 To Bank A/c                          3,300 (Being amount paid to the party) Note: Being amount paid after 10days, therefore no discount received by the buyer \"Willem Corporartion\". In the Books of Cate Corporation Note: There are two methods of accounting for discounts in the books of seller:- A)Net Method, and B)Gross Method. Method A) Net Method Sl No. Date Particulars Debit Amount($) Credit Amount($) 1 04-Jun Willem Corporation A/c Dr                          3,920 To Sales Revenue A/c                          3,920 (Being goods sold on credit and recorded at sale price less cash discount) ($4000-[$4000*2%]) 2 10-Jun Sales Return A/c Dr.                             686 To Willem Corporation A/c                              686 (Being goods returned by the buyer) ($700-[$700*2%]) 3 26-Jun Bank A/c Dr ($4000-$700)                          3,300 To Interest Revenue A/c                                66 To Willem Corporation A/c                          3,234 (Being amount paid by the buyer) Method B) Gross Method Sl No. Date Particulars Debit Amount($) Credit Amount($) 1 04-Jun Willem Corporation A/c Dr                          4,000 To Sales Revenue A/c                          4,000 (Being goods sold on credit and recorded at sale price) 2 10-Jun Sales Return A/c Dr.                             700 To Willem Corporation A/c                              700 (Being goods returned by the buyer) 3 26-Jun Bank A/c Dr ($4000-$700)                          3,300 To Willem Corporation A/c                          3,300 (Being amount paid by the buyer)