Teague Company engaged in the following transactions in

October 2014
Teague Company engaged in the following transactions in October 2014:Oct. 7 Sold
merchandise on credit to Mel Forde, terms n/30, FOB shipping point, $12,000 (cost, $7,200).8
Purchased merchandise on credit from Surf Company, terms n/30, FOB shipping point,
$24,000.9 Paid Surf Company for shipping charges on merchandise purchased on October 8,
$1,016.10 Purchased merchandise on credit from Tata Company, terms n/30, FOB shipping
point, $38,400, including $2,400 freight costs paid by Tata.14 Sold merchandise on credit to
David Johnson, terms n/30, FOB shipping point, $9,600 (cost, $5,760).14 Returned damaged
merchandise received from Surf Company on October 8 for credit, $2,400.17 Received check
from Mel Forde for her purchase of October 7.19 Sold merchandise for cash, $7,200 (cost,
$4,320).20 Paid Tata Company for purchase of October 10.21 Paid Surf Company the balance
from the transactions of October 8 and October 14.24 Accepted from David Johnson a return of
merchandise, which was put back in inventory, $800 (cost, $480).Required1. Prepare journal
entries to record the transactions, assuming use of the perpetual inventory system. (Hint: Refer
to the TriLevel Problem feature.)2. Receiving cash rebates from suppliers based on the past
year’s purchases is a common practice in some industries. If, at the end of the year, Teague
receives rebates in cash from a supplier, should these cash rebates be reported as revenue?
Why or why not?View Solution:
Teague Company engaged in the following transactions in October 2014
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