E5-4 On June 10, Meredith Company purchased $8,000 of merchandise from Leinert
Company, FOB shipping point, terms 2/10, n/30. Meredith pays the freight costs of $400 on June
11. Damaged goods totaling $300 are returned to Leinert for credit on June 12.The scrap value
of these goods is $150. On June 19, Meredith pays Leinert Company in full, less the purchase discount. Both companies use a perpetual inventory system.
Instructions
(a) Prepare separate entries for each transaction on the books of Meredith Company.
(b) Prepare separate entries for each transaction for Leinert Company. The merchandise purchased
by Meredith on June 10 had cost Leinert $5,000.
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