1. On August 1, Academy Supply had an inventory of 50 computer desks at a cost o
ID: 2417071 • Letter: 1
Question
1. On August 1, Academy Supply had an inventory of 50 computer desks at a cost of
$125 each. The company uses a perpetual inventory system. During August, the
following transactions and events occurred.
Aug. 4 Purchased 10 desks at $125 each from Morris, terms 1/10, n/30.
Aug. 6 Received credit of $250 for the return of 2 desks purchased on Aug. 4 that were defective.
Aug. 9 Sold 12 desks for $175 each to Wonder School, terms 2/10, n/30.
Aug. 14 Paid Morris in full, less discount.
Aug. 15 Issued a credit to Wonder School for the return of 1 desk which is in usable condition and will be returned to stock.
Aug. 27 Received payment in full from Wonder School for the sale on Aug. 9.
Date
Account Titles
Debit
Credit
Date
Account Titles
Debit
Credit
Explanation / Answer
JOURNAL ENTRIES:
DATE ACCOUNT TITLES DEBIT CREDIT AUG 4 PURCHASE 1250 TO MORRIS 1250 (BEING 10 COMPUTER DESK PURCHASED FROM MORRIS) AUG 6 MORRIS 250 TO PURCHASES 250 (BEING CREDIT RECEIVED FOR RETURN OF 2 DESK) AUG 9 PURCHASE 2100 TO WONDER SCHOOL 2100 (BEING COMPUTER DESK PURCHASED FROM WONDER SCHOOL) AUG 14 MORRIS 1000 TO CASH 990 TO DISCOUNT 10 (BEING PAYMENT MADE TO MORRIS) AUG 15 WONDER SCHOOL 175 TO PURCHASES 175 (BEING CREDIT ISSUED FOR RETURN OF 1 DESK) AUG 27 WONDER SCHOOL 1925 TO CASH 1887 TO DISCOUNT 38 (BEING PAYMENT MADE TO WONDER SCHOOL)Related Questions
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