Zorzi Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Zorzi purchased $60,000 inventory, terms 2/10, n/30 FOB shipping point Zorzi paid freight costs of $1,200 On July 3, Zorzi returned damaged goods and received a credit of $6,000. On July 10 Zorzi paid for the goods. Prepare the Journal Entries for the Freight Costs O Freight-in $1,200 Cash $1,200 O Purchases $1,200 Cash $1,200 Inventory $1,200 Cash $1.200 O Cash $1,200 Freight-in $1.200
Zorzi Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Zorzi purchased $60,000 inventory, terms 2/10, n/30 FOB shipping point Zorzi paid freight costs of $1,200 On July 3, Zorzi returned damaged goods and received a credit of $6,000. On July 10 Zorzi paid for the goods. Prepare the Journal Entries for the Freight Costs O Freight-in $1,200 Cash $1,200 O Purchases $1,200 Cash $1,200 Inventory $1,200 Cash $1.200 O Cash $1,200 Freight-in $1.200
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 37E: Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following...
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Transcribed Image Text:Zorzi Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts On July 1, Zorzi
purchased $60,000 inventory, terms 2/10, n/30 FOB shipping point Zorzi paid freight costs of $1,200
On July 3, Zorzi returned damaged goods and received a credit of $6,000. On July 10 Zorzi paid for the goods.
Prepare the Journal Entries for the Freight Costs
O Freight-in
Cash
$1,200
S1,200
O Purchases
$1,200
Cash
S1,200
O Inventory
$1,200
Cash
$1 200
Cash
$1.200
Freight-in
$1.200
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Step 1 Introduction
In periodic inventory system, separate account for delivery costs is maintained other than main inventory account.
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