On june 10, cullumber company purchased $6,300 of merchandise on account from whispering winds company, fob shipping point, terms 1/10, n/30. cullumber company pays the freight costs of $410 on june 11. damaged goods totaling $300 are returned to whispering winds for credit on june 12. the fair value of these goods is $70. on june 19, cullumber company pays whispering winds company in full, less the purchase discount. both companies use a perpetual inventory system. prepare journal entries for both company separately.

The Journal entries are as follows:

(a) On June 10,

Account Receivables A/c   Dr. $6,300

To sales                                                       $6,300

(To record sale of merchandise)

(b) On June 12,

(i) Sales Return & allowance A/c    Dr. $300

To Account Receivables                                $300

(Being Merchandise return by customer)

(ii) Merchandise Inventory A/c       Dr.  $70

To Cost of goods sold                                    $70

(To record cost of merchandise returned)

(c) On June 19,

Cash A/c                    Dr. 5,940

Sales discount A/c    Dr. 60

To Account Receivable                 $6,000

(Being Amount actually received on Credit sale after allowing discount)  

statement of owner's equity;