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Journal Entries for Merchandise Transactions-Perpetual System Webster Company was established on July 1. Its sales terms are 2/10, 1/30. Credit terms for its purchases vary with the supplier. Selected transactions for the first month of operations are given below. Unless noted, all transactions are on account and involve merchandise held for resale. Webster Company uses the perpetual inventory system July 1Purchased goods from Dawson, Inc. $2.400; terms 1/10. n/30. 2 Purchased goods from Penn Company, 14,700; terms 2/10, 130 3 Paid freighton shipment from Dawson, $150 5 Sold merchandise to Ward, Inc. $1.000 (51.475 cost) 5 Paid freighton shipment to Ward, Inc. $110./Hint: debit Delivery Expenses 8 Returned $300 worth of the goods purchased July 1 from Dawson, Inc, because some goods were damaged, Dawson approved the return 9 Received returned goods from Ward, Inc. worth $250 (5200 cost). 10 Paid Dawson, Inc., the amount due 10 Purchased goods from Dorn Company with a list price of $2.000. Terms 2/10,30 11 Paid freighton shipment from Dorn Company $180 15 Received the amount due from Ward, Inc 15 Sold merchandise to Colby Corporation, $3.700 (52.900 cost) 16 Mailed a check to Penn Company for the amount due on its July 2 invoice 10 18 Received an allowance of $150 from Dorn Company for defective merchandise purchased on 19 Paid Dorn Company the amount due 25 Received the amount due from Colby Corporation Credit $ Debit 2400 $ 0 0 2400 4700 4700 150 0 150 1800 1800 1475 Date Description July 1 Inventory Accounts Payable Purchases from Dawson, Inc., 1/10, n/30. 2 Inventory Accounts Payable Purchases from Penn Company, 2/10, n/30. 3 Inventory Cash Paid freight on Dawson shipment. 5 Accounts Receivable Sales Revenue Sales to Ward, Inc. 5 Cost of Goods Sold Inventory Cost of goods sold to Ward, Inc. 5 Delivery Expense Cash Paid freight on shipment to Ward, Inc. 8 Accounts Payable Inventory Returned goods to Dawson, Inc. 9 Sales Returns and Allowances Accounts Receivable Issued credit memc to Ward, Inc., for goods returned. 9 Inventory Cost of Goods Sold Cost of goods returned by Ward, Inc. 10 Accounts Payable Inventory Cash 300 300 0 250 200 200 ooo ooo Paid Dawson, Inc. the amount due. o Purchases from Dorn Company, 2/10,n/30. 11 Inventory Cash Paid freight on Dorn shipment. 15 Cash Accounts Receivable 0 0 0 0 0 0 Received amount due from Ward, Inc. o O O Sales to Colby Corporation. 15 O o O Cost of goods sold to Colby Corporation. 16 Accounts Payable Cash Paid Penn Company the amount due. oo O O O O o Received credit memo for price adjustment from Dorn Company. O O O Cash Paid Dorn the amount due. 25 Cash O O Received amount due from Colby Corporation

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