On September 1, Howe Office Supply had an inventory of 30 pocket calculators at

Question

On September 1, Howe Office Supply had an inventory of 30 pocket calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred. Sept. 6 Purchased 80 calculators at $20 each from De Vito Co. for cash. 9 Paid freight of $80 on calculators purchased from De Vito Co. 10 Returned 2 calculators to De Vito Co. for a $42 credit (including freight) because they did not meet specifications. 12 Sold 26 calculators costing $21 (including freight) for $31 each to Mega Book Store, terms n/30. 14 Granted credit of $31 Mega Book Store for the return of one calculator that was not ordered. 20 Sold 30 calculators costing $21 for $31 each to Barbara's Card Shop, terms n/30. Instructions Journalize the September transactions.

Explanation / Answer

Sept. 6 Purchased 80 calculators at $20 each from De Vito Co. for cash. Merchandise inventory Dr. 1600 Cash Cr. 1600 9 Paid freight of $80 on calculators purchased from De Vito Co. Merchandise inventory Dr. 80 Cash Cr. 80 10 Returned 2 calculators to De Vito Co. for a $42 credit (including freight) because they did not meet specifications. Accounts payable Dr. 42 Merchandise inventory Cr. 42 12 Sold 26 calculators costing $21 (including freight) for $31 each to Mega Book Store, terms n/30. Accounts receivable Dr. 806 Sales Cr. 806 Cost of merchandise sold Dr. 546 Merchandise inventory Cr. 546 14 Granted credit of $31 Mega Book Store for the return of one calculator that was not ordered. Sales returns and allowances Dr. 31 Accounts receivable Cr. 31 Merchandise inventory Dr. 21 Cost of merchandise sold Cr. 21 20 Sold 30 calculators costing $21 for $31 each to Barbara's Card Shop, terms n/30. Accounts receivable Dr. 930 Sales Cr. 930 Cost of merchandise sold Dr. 630 Merchandise inventory Cr. 630 Hope this helps.

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