Journalize the following transactions that occurred in June 2018 for Daley Company. Assume Daley uses the periodic inventory system. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Daley estimates sales returns at the end of each month.

Jun. 3 Purchased merchandise inventory on account from Sherry Wholesalers, \(5,500. Terms 3/15, n/EOM, FOB shipping point.

4 Paid freight bill of \)42 on June 3 purchase.

4 Purchased merchandise inventory for cash of \(1,100.

6 Returned \)200 of inventory from June 3 purchase.

8 Sold merchandise inventory to Henrich Company, \(4,400, on account. Terms 2/15, n/35.

9 Purchased merchandise inventory on account from Tex Wholesalers, \)4,600. Terms 1/10, n/30, FOB destination.

10 Made payment to Sherry Wholesalers for goods purchased on June 3, less return and discount.

12 Received payment from Henrich Company, less discount.

13 After negotiations, received a \(300 allowance from Tex Wholesalers.

15 Sold merchandise inventory to Jarvis Company, \)1,500, on account. Terms n/EOM.

22 Made payment, less allowance, to Tex Wholesalers for goods purchased on June 9.

23 Jarvis Company returned \(100 of the merchandise sold on June 15.

25 Sold merchandise inventory to Smith for \)700 on account. Terms of 3/10, n/30 was offered, FOB shipping point.

29 Received payment from Smith, less discount.

30 Received payment from Jarvis Company, less return.

Step by step solution

01

Meaning of Discount

In accounting, the term discount refers to thereduction or rebatein the price of the goods by the businesses to their customers. Discounts are majorly bifurcated or divided intosales and purchase discounts, and both are treated separately while maintaining books.

02

Preparation of journal entries 

Date	Accounts and Explanation	Debit ($)	Credit ($)
2018
Jun 3	Merchandise inventory	5,500
	Accounts payable (Sherry Wholesalers)		5,500
Jun 4	Merchandise inventory	42
	Cash		42
Jun 4	Merchandise inventory	1,100
	Cash		1,100
Jun 6	Accounts payable (Sherry Wholesalers)	200
	Merchandise inventory		200
Jun 8	Accounts receivable (Henrich Company)	4,400
	Sales revenue		4,400
Jun 9	Merchandise inventory	4,600
	Accounts payable (Tex wholesalers)		4,600
Jun 10	Accounts payable (Sherry Wholesalers) [5500-200]	5,300
	Merchandise inventory (5300*3%)		159
	Cash		5,141
Jun 12	Cash	4,312
	Sales discount (4400*2%)	88
	Accounts receivable (Henrich Company)		4,400
Jun 13	Accounts payable (Tex wholesalers)	300
	Merchandise inventory		300
Jun 15	Accounts receivable (Jarvis company)	1,500
	Sales revenue		1,500
Jun 22	Accounts payable (Tex wholesalers) [4600-300]	4,300
	Cash		4,300
Jun 23	Sales returns and allowances	100
	Accounts receivable (Jarvis company)
Jun 25	Accounts receivable (Smith)	700
	Sales revenue		700
Jun 29	Cash	679
	Sales discount (700*3%)	21
	Accounts receivable (Smith)		700
Jun 30	Cash	1,400
	Accounts receivable (Jarvis company) [1500-100]		1,400

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