Velez corporation purchased $1000 worth of merchandise, terms 2/10, n/30, from the Manor corporation on May 4, on May 10, Velez returned $100 worth of goods to Manor for full credit.
May 12, the account was paid in full.
Prepare entries in journal form without explanations to record these transactions in
a) velez's records
b) manors records
Assume use of periodic inventory system.

Quote:

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Originally Posted by Akhatoon

Velez corporation purchased $1000 worth of merchandise, terms 2/10, n/30, from the Manor corporation on May 4, on May 10, Velez returned $100 worth of goods to Manor for full credit.
May 12, the account was paid in full.
Prepare entries in journal form without explanations to record these transactions in
a) velez's records
b) manors records
assume use of periodic inventory system.

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In the periodic system you don't use the cost of goods sold or merchandise inventory accounts
For a (valez's records)
Dr. Purchanses... 1,000
Cr. Accounts Payable... 1,000
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Dr.Accounts Payable... 100
Cr. Purchase returns and allowances... 100
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Dr.Accounts Payable... 900
Cr.Purchase discounts... 18
Cr. Cash... 882
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For b (manor's records)
Dr.Accounts receivable... 1,000
Cr. Sales... 1,000
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Dr.Sales returns and allowace... 100
Cr.Accounts receivable... 100
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Dr.Cash... 882
Dr.Sales discounts... 18
Cr. Accounts receivable... 900