John’s Specialty Store uses a perpetual inventory system. The following are some
ID: 2396008 • Letter: J
Question
John’s Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May 2018:
John’s purchased merchandise on account for $6,800. Freight charges of $1,200 were paid in cash.
John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $1,500 and John’s account was credited by the supplier.
Merchandise costing $3,700 was sold for $7,000 in cash.
Required:
Prepare the necessary journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. Record the merchandise purchased on account for $6,800.
2. Record the freight charges of $1,200.
3.Record the return of merchandise costing $1,500.
4.Record the sale of merchandise for $7,000 in cash.
5. Record the cost of goods sold for $3,700.
Explanation / Answer
Journal entry :
No Account & explanation debit credit 1 Merchandise inventory 6800 Account payable 6800 (To record purchase) 2 Merchandise inventory 1200 Cash 1200 (TO record freight paid) 3 Account payable 1500 Merchandise inventory 1500 (To record return) 4 Cash 7000 Sales revenue 7000 (To record Sales) 5 Cost of goods sold 3700 Merchandise inventory 3700 (TO record cost of goods sold)Related Questions
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