The Bixby Co $\$ 6,000$ From the Shelby Manufacturing Co $10 , \mathrm { n } / 30$

question 53

Essay

The Bixby Co. had the following transactions involving the purchase of merchandise. Prepare the necessary general journal entries. Any applicable freight costs are prepaid by the seller. The perpetual inventory method is in use.
June 16 Purchased merchandise having a price of $\$ 6,000$ from the Shelby Manufacturing Co. on account with credit terms $10 , \mathrm { n } / 30$ . Transportation terms F.O.B destination.
June 16 Purchased merchandise having a price of $\$ 9,000$ from the Ajax Supply House on account with credit terms $2 / 10 , \mathrm { n } / 30$ . Transportation terms F.O.B shipping point. The freight costs were $\$ 175$ .
June 17 Received the goods from Shelby.
June 17 Received the goods from Ajax.
June 20 Returned for credit merchandise with an invoice price of $\$ 800$ to Ajax.
June 25 Paid Shelby the amount owed.
June 28 Paid Ajax the amount owed.
June 30 Returned for cash, merchandise with an invoice price of $\$ 400$ to Shelby.
-Prepare the necessary general journal entry for June 16,Purchased merchandise having a price of $6,000 from the Shelby Manufacturing Co.on account with credit terms 2/10,n/30.Transportation terms F.O.B destination.

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Definitions:

Oral Agreements

Contracts or agreements that are made through spoken communication rather than in writing, though their legal enforceability can vary.

Arbitration

A form of dispute resolution where an impartial third party, the arbitrator, makes a decision to resolve a dispute outside of court.

Dissolution

Dissolution is the process through which a legal entity ceases to exist, involving the winding up of affairs, paying off debts, and distributing any remaining assets to owners.

Liquidate

The process of converting assets into cash or cash equivalents by selling them, often used in the context of dissolving a business.