Introduction to Inventories Practice Problems

Complete the practice problems. Check your answers after you finish.

Demonstration problem

The following transactions occurred between Companies C and D in June 2010:

June 10 Company C purchased merchandise from Company D for USD 80,000; terms 2/10/EOM, n/60, FOB destination, freight prepaid.

11 Company D paid freight of USD 1,200.

14 Company C received an allowance of USD 4,000 from the gross selling price because of damaged goods.

23 Company C returned USD 8,000 of goods purchased because they were not the quality ordered.

30 Company D received payment in full from Company C.


a. Journalize the transactions for Company C.

b. Journalize the transactions for Company D.

Source: Textbook Equity,
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