Asked by Jesus Gonzalez Jauregui on May 09, 2024
Verified
Grimm Brothers Supply uses a periodic inventory system. During May the following transactions and events occurred. May 13 Purchased 10 motors at a cost of $42 each from Thompson Company, terms 4/10,n/30. The motors cost Thompson Company $25 each. May16 Returned 1 defective motor to Thompson May 23 Paid Thompson Company in full. Round to nearest dollar. \begin{array}{lll} \text { May }&13 & \text { Purchased 10 motors at a cost of \( \$ 42 \) each from Thompson Company, terms } \\&& \text { \( 4 / 10, n / 30 \). The motors cost Thompson Company \( \$ 25 \) each. } &\\\\ \text { May} &16& \text { Returned 1 defective motor to Thompson } \\\\ \text { May } &23& \text { Paid Thompson Company in full. Round to nearest dollar. } \\\end{array} May May May 131623 Purchased 10 motors at a cost of $42 each from Thompson Company, terms 4/10,n/30. The motors cost Thompson Company $25 each. Returned 1 defective motor to Thompson Paid Thompson Company in full. Round to nearest dollar.
Instructions
Journalize the May transactions for Grimm Brothers. You may omit explanations.
Periodic Inventory System
An accounting method where inventory levels and cost of goods sold are updated at specific intervals, rather than continuously.
Transactions
Financial events or exchanges between parties that have a monetary impact on the financial statements of a business.
- Examine the effects of inventory transactions on the income statement and associated accounting records.
- Comprehend the accounting practices for handling purchase discounts, returns, and allowances.
Verified Answer
JS
Joeline SolanoMay 13, 2024
Final Answer :
May 13 Purchases420 Accounts Payable 420 May 16 Accounts Payable 42 Purchase Returns and Allowances.42 May 23Accounts Payable ($420−$42) 378 Purchase Discounts ($378×.04) 15 Cash 363\begin{array}{llll} \text { May } &13& \text { Purchases} &420\\&& \text { Accounts Payable } &&420\\\\ \text { May }&16 & \text { Accounts Payable } &42\\&& \text { Purchase Returns and Allowances.} &&42\\\\ \text { May } &23& \text {Accounts Payable \( (\$ 420-\$ 42) \) } &378\\&& \text { Purchase Discounts \( (\$ 378 \times .04) \) } &&15\\&& \text { Cash } &&363\end{array} May May May 131623 Purchases Accounts Payable Accounts Payable Purchase Returns and Allowances.Accounts Payable ($420−$42) Purchase Discounts ($378×.04) Cash 420423784204215363
Learning Objectives
- Examine the effects of inventory transactions on the income statement and associated accounting records.
- Comprehend the accounting practices for handling purchase discounts, returns, and allowances.
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