Sales-Related and Purchase-Related Transactions for Seller and Buyer Using Perpetual Inventory System The following selected transactions were completed during April between Swan Company and Bird Company: Apr. 2. Swan Company sold merchandise on account to Bird Company, $19,900, terms FOB shipping point, 1/10, n/30. Swan Company paid freight of $435, which was added to the invoice. The cost of the merchandise sold was $12,500. 8. Swan Company sold merchandise on account to Bird Company, $25,000, terms FOB destination, 2/15, n/30. The cost of the merchandise sold was $15,000. 8. Swan Company paid freight of $650 for delivery of merchandise sold to Bird Company on April 8. 12. Bird Company paid Swan Company for purchase of April 2. 18. Swan Company paid Bird Company a refund of $2,000 for defective merchandise in the April 2 purchase. Bird Company agreed to keep the merchandise. 23. Bird Company paid Swan Company for purchase of April 8. 24. Swan Company sold merchandise on account to Bird Company, $11,200, terms FOB shipping point, n/45. The cost of the merchandise sold was $6,700. 26. Bird Company paid freight of $280 on April 24 purchase from Swan Company. Required: 1. Journalize the April transactions for Bird Company (the buyer). If an amount box does not require an entry, leave it blank.

1. Bird Company (Buyer)

Apr-02Dr Merchandise Inventory$20,335

Cr Accounts Payable $20,335

Apr-08Dr Merchandise Inventory$25,000

Cr Accounts Payable $25,000

Apr-08No entry

Apr-12Dr Accounts Payable$20,335

Cr Cash $19,937

Cr Merchandise Inventory $ 398

Apr-18 Dr Cash$ 2,000

Cr Merchandise Inventory $ 2,000

Apr-23 Dr Accounts Payable$25,000

Cr Cash $24,750

Cr Merchandise Inventory $ 250

Apr-24 Dr Merchandise Inventory$11,200

Cr Accounts Payable $11,200

Apr-26 Dr Merchandise Inventory$280

Cr Cash $280

2.Swan Company (Seller)

Apr-02 Dr Accounts Receivable$20,335

Cr Sales Revenue $19,900

Cr Cash $435

Dr Cost of Goods Sold$12,500

Dr Merchandise Inventory $12,500

Apr-08 Dr Accounts Receivable$ 25,000

Cr Sales Revenue $ 25,000

Dr Cost of Goods Sold$15,000

Cr Merchandise Inventory $15,000

Apr-08 Dr Delivery Expense$650

Cr Cash $650

Apr-12 Dr Cash$19,937

Dr Sales Discounts$ 398

Cr Accounts Receivable $20,335

Apr-18 Dr Sales Returns and allowances$ 2,000

Cr Cash $ 2,000

Apr-23Dr Cash$ 24,750

Dr Sales Discounts$ 250

Cr Accounts Receivable $25,000

Apr-24 Dr Accounts Receivable$11,200

Cr Sales Revenue $11,200

Dr Cost of Goods Sold$6,700

Cr Merchandise Inventory $6,700

Apr-26No entry

Explanation:

1. Preparation of the journal entry for Bird Company (the buyer).

Bird Company (Buyer)

Apr-02Dr Merchandise Inventory$20,335

Cr Accounts Payable $20,335

($19,900+$435)

Apr-08Dr Merchandise Inventory$25,000

Cr Accounts Payable $25,000

Apr-08No entry

Apr-12Dr Accounts Payable$20,335

($19,900+$435)

Cr Cash $19,937

($20,334-$398)

Cr Merchandise Inventory $ 398

($19,900*2%)

Apr-18 Dr Cash$ 2,000

Cr Merchandise Inventory $ 2,000

Apr-23 Dr Accounts Payable$25,000

Cr Cash $24,750

($25,000-$250)

Cr Merchandise Inventory $ 250

(1%*$25,000)

Apr-24 Dr Merchandise Inventory$11,200

Cr Accounts Payable $11,200

Apr-26 Dr Merchandise Inventory$280

Cr Cash $280

2. Preparation of the journal entry for Bird Company the (Seller).

Swan Company (Seller)

Apr-02 Dr Accounts Receivable$20,335

($19,900+$435)

Cr Sales Revenue $19,900

Cr Cash $435

Dr Cost of Goods Sold$12,500

Dr Merchandise Inventory $12,500

Apr-08 Dr Accounts Receivable$ 25,000

Cr Sales Revenue $ 25,000

Dr Cost of Goods Sold$15,000

Cr Merchandise Inventory $15,000

Apr-08 Dr Delivery Expense$650

Cr Cash $650

Apr-12 Dr Cash$19,937

($20,335-$398)

Dr Sales Discounts$ 398

(2%*$19,900)

Cr Accounts Receivable $20,335

(19,900+435)

Apr-18 Dr Sales Returns and allowances$ 2,000

Cr Cash $ 2,000

Apr-23Dr Cash$ 24,750

Dr Sales Discounts$ 250

(1%*25,000)

Cr Accounts Receivable $25,000

Apr-24 Dr Accounts Receivable$11,200

Cr Sales Revenue $11,200

Dr Cost of Goods Sold$6,700

Cr Merchandise Inventory $6,700

Apr-26No entry

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.