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Gilberto Co. - Journal Entries

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Information related to Gilberto Co. is presented
1. On April 5, purchased merchandise from Allman Company for $20,000 terms 2/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $900 on merchandise purchased from Allman.
3. On April 7, purchased equipment on account for $26,000.
4. On April 8, returned damaged merchandise to Allman Company and was granted a $4,000 allowance for returned merchandise.
5. On April 15, paid the amount due to Allman Company in full.

Instructions(complete in excel)
(a) Prepare the journal entries to record these transactions on the books of Gilberto Co. under a perpetual inventory system.

(b) Assume that Gilberto Co. paid the balance due to Allman Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

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Solution Summary

This solution is comprised of a detailed explanation to answer the request of the assignment in excel file.

Solution Preview

a) Journal Entries

April 5 Inventory 20,000
Accounts Payable 20,000

April 6 Freight-in Expense 900
Cash 900

April 7 Equipment 26,000 ...

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