Data for Olaf Company and DeVito Company are presented in E5-4. In E5-4 Apr. 5 Olaf Company…

Data for Olaf Company and DeVito Company are presented in E5-4. In E5-4 Apr. 5 Olaf Company purchased merchandise from DeVito Company for $12,000, terms 2/10, n/30, FOB shipping point. DeVito had paid $8,500 for the merchandise. 6 The correct company paid freight costs of $300. 8 Olaf Company returned damaged merchandise to DeVito Company and was given a purchase allowance of $1,800. DeVito determined the merchandise could not be repaired and sent it to the recyclers. The merchandise had cost DeVito $1,275. May 4 Olaf paid the amount due to DeVito Company in full. Apr. 5 Olaf Company purchased merchandise from DeVito Company for $12,000, terms 2/10, n/30, FOB shipping point. DeVito had paid $8,500 for the merchandise. 6 The correct company paid freight costs of $300. 8 Olaf Company returned damaged merchandise to DeVito Company and was given a purchase allowance of $1,800. DeVito determined the merchandise could not be repaired and sent it to the recyclers. The merchandise had cost DeVito $1,275. May 4 Olaf paid the amount due to DeVito Company in full. Instructions (a) Prepare the journal entries to record these transactions on the books of Olaf Company using a periodic inventory system instead of a perpetual system. (b) Prepare the journal entries to record these transactions on the books of DeVito Company using a periodic inventory system instead of a perpetual system.

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