Question 1.) Assume the following transactions occurred between Walgreen Co., the pharmacy chain, and Procter & Gamble (P&G), the consumer products company, during June of the current year.
June 8 – P&G sold $6,000 worth of merchandise to Walgreen on terms of 2/10 n/30, FOB shipping point. P & G prepaid freight charges of $200.00 and included this amount in the invoice total. (P&G’s entry to record the freight payment debits Accounts Receivable and credits Cash.) These goods cost
P&G $2,100.
June 11 – Walgreen returned $1,000 of the merchandise purchased on June 8.
P & G accounted for the sales return and placed the goods back to inventory (P&G’s cost $400.00)
June 17 – Walgreen paid $2,000 of the invoice amount owed to P&G for the June 8 purchase, less the discount. This payment included none of the freight charge.
June 26 – Walgreen paid the remaining amount owed to P&G for the June 8 purchase.
Need to Journalize these transactions, first on the books of Walgreen Co. and, second, on the books of Procter & Gamble.
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