Reference no: EM132692127

The following selected transactions were completed during August between Summit Company and Beartooth Co. Both companies use the net method under a perpetual inventory system.

Aug:

1 Summit Company sold merchandise on account to Beartooth Co., $48,000, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $28,800.
2 Summit Company paid freight of $1,150 for delivery of merchandise sold to Beartooth Co. on August 1.
5 Summit Company sold merchandise on account to Beartooth Co., $66,000, terms FOB shipping point, n/eom. The cost of the goods sold was $40,000.
9 Beartooth Co. paid freight of $2,300 on August 5 purchase from Summit Company.
15 Summit Company sold merchandise on account to Beartooth Co., $58,700, terms FOB shipping point, n/45. Summit paid freight of $1,675, which was added to the invoice. The cost of the goods sold was $35,000.
16 Beartooth Co. paid Summit Company for purchase of August 1.
20 Summit Company paid Beartooth Co. a cash refund of $1,000 for defective merchandise purchased on August 1. Beartooth Co. kept the merchandise.31Beartooth Co. paid Summit Company on account for purchase of August 5.
31 Summit Company issued Beartooth Co. a credit memo for merchandise with an invoice amount of $4,000 that was returned from the August 15 sale. The cost of the merchandise returned was $2,500.

Problem 1: Journalize the August transactions for (1) Summit Company and (2) Beartooth Co. Refer to the Chart of Accounts of the appropriate company for exact wording of account titles.