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The following selected transactions were completed by Betz Company during July of the current year. Betz Company uses the net method under a perpetual inventory system. July 1 Purchased merchandise from Sabol Imports Co., $20,500, terms FOB destination, n/30. 3 Purchased merchandise from Saxon Co., $12,000, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $75 was added to the invoice. 5 Purchased merchandise from Schnee Co., $8,000, terms FOB destination, 2/10, n/30. Journalize the entries to record the transactions of Betz Company for July. Refer to the Chart of Accounts for exact wording of account titles.

Respuesta :

TomShelby

Answer:

Inventory   20,500    debit

    A/P                      20,500 credit

Inventory   12,075    debit

    A/P                      12,075 credit

Inventory   8,000    debit

    A/P                     8,000 credit

Explanation:

We will debit our inventory for the amount of merchandise we purchased and any other cost needed to get it ready for sale in our stock.

In the case of the second purchase as the terms are shipping point the goods are ours from the moment their are loaded into the ship thus, we should pay the freights. This will be a necessary cost to get the inventory so we activate through inventory instead of declaring an expense.

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