John\'s Specialty Store uses a periodic inventory system. The following are some

Question

John's Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May 2013: 1. John's purchased merchandise on account for $6,300. Freight charges of $950 were paid in cash. 2. Johns returned some of the merchandise purchased in (1). The cost of the merchandise was $1,250 and Johns account was credited by the supplier. 3. Merchandise costing $3,450 was sold for $6,500 in cash. Required:Prepare the necessary journal entries to record these transactions 1.Record the purchased merchandise on account for $6,300. . 2.Record the payment of freight charges for $950. . 3.Record the purchase return for $1,250. . 4.Record the merchandise sold for $6,500. . 5.Record the entry of cost of goods sold. .

Explanation / Answer

. John's purchased merchandise on account for $6,300. Freight charges of $950 were paid in cash. Purchases A/c Dr $6300 Frieght A/c Dr $950 To Cash A/c $950 To Accounts Payables $6300 2. John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $1,250 and John’s account was credited by the supplier. Accounts Payable Dr $1250 To Purchases Returns $1250 3. Merchandise costing $3,450 was sold for $6,500 in cash. Cash A/c Dr $6500 To Profit on sale $3050 To Cost of goods sold $3450

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