What would be the Journal Entries for this simple transaction!!?

Supplier: Miriam Bookstore, P8,000


Invoice date: May 28


Freight terms: F.O.B. Shipping Destination


Freight paid by: CS Schools supplies


Date Account paid: June 7





What would be the Journal Entries?


Thank you!|||When were the items received by Miriam Bookstore? Since FOB shipping is the destination point the property does not change ownership until the items arrive at Miriam Bookstore.





When the items do arrive, Miriam Bookstore would debit the appropriate asset account and credit Accounts Payable. When they pay, they would then debit A/P and credit Cash.





When the items arrive, CS Schools Supplies would debit Accounts Receivable and credit Inventory (assuming a perpetual inventory system, not periodic). They would also have to debit COGS and credit Sales. When payment was received on June 7th, and not taking into account any coupon requirement was met, then CS would debit Cash and clear out the A/R account for that amount that had been owed. COGS as an expense and Sales as a revenue would not be affected by receipt of payment. Hopefully this helped, it is just off the top of my head.





These journal entries are assuming that FOB is not occurring at the end of an operating cycle. If the goods are being transferred while financial statements have to be prepared then that is a whole other can of worms. Isn't accounting fun? :D