The following selected transactions were completed during April between Swan Company and Bird Company:

The following selected transactions were completed during April between Swan Company and Bird Company:

Apr.

  2. Swan Company sold merchandise on account to Bird Company, $32,000, terms FOB shipping point, 2/10, n/30. Swan Company paid freight of $330, which was added to the invoice. The cost of the merchandise sold was $19,200.

  8. Swan Company sold merchandise on account to Bird Company, $49,500, terms FOB destination, 1/15, n/30. The cost of the merchandise sold was $29,700.

  8. Swan Company paid freight of $710 for delivery of merchandise sold to Bird Company on April 8.

 12. Bird Company paid Swan Company for purchase of April 2.

 18. Swan Company paid Bird Company a refund of $2,000 for defective merchandise in the April 2 purchase. Bird Company  agreed to keep the merchandise. 

 23. Bird Company paid Swan Company for purchase of April 8.

 24. Swan Company sold merchandise on account to Bird Company, $67,350, terms FOB shipping point, n/45. The cost of the merchandise sold was $40,400.

 26. Bird Company paid freight of $875 on April 24 purchase from Swan Company.

 30. Swan Company granted a customer allowance (credit memo) to Bird Company for $11,300  for merchandise that was returned from the August 24 purchase. The cost of the merchandise returned was $6,500. 

Instructions

Journalize the April transactions for (1) Swan Company and (2) Bird Company.

Answer:

1.

 Apr. 2 Accounts Receivable—Bird Company 31,360

Sales31,360

[$32,000 – ($32,000 × 2%)] 

2 Accounts Receivable—Bird Company 330

Cash330

2 Cost of Merchandise Sold 19,200

Merchandise Inventory19,200

8 Accounts Receivable—Bird Company 49,005

Sales49,005

[$49,500 – ($49,500 × 1%)]

8 Cost of Merchandise Sold 29,700

Merchandise Inventory29,700

8 Delivery Expense710

Cash710

12 Cash ($31,360 + $330)31,690

Accounts Receivable—Bird Company 31,690

18 Customer Refunds Payable 2,000

Cash2,000

23 Cash49,005

Accounts Receivable—Bird Company 49,005

24 Accounts Receivable—Bird Company 67,350

Sales67,350

24 Cost of Merchandise Sold 40,400

Merchandise Inventory40,400

30 Customer Refunds Payable 11,300

Accounts Receivable—Bird Company 11,300

30 Merchandise Inventory6,500

Estimated Returns Inventory6,500

2.

 Apr. 2 Merchandise Inventory ($31,360 + $330) 31,690

Accounts Payable—Swan Company 31,690

8 Merchandise Inventory49,005

Accounts Payable—Swan Company 49,005

[$49,500 – ($49,500 × 1%)]

12 Accounts Payable—Swan Company 31,690

Cash31,690

18 Cash2,000

Merchandise Inventory2,000

23 Accounts Payable—Swan Company 49,005

Cash49,005

24 Merchandise Inventory67,350

Accounts Payable—Swan Company 67,350

26 Merchandise Inventory875

Cash875

30 Accounts Payable—Swan Company 11,300

Merchandise Inventory11,300