Pronghorn Warehouse distributes suitcases to retail stores and extends credit te

Question

Pronghorn Warehouse distributes suitcases to retail stores and extends credit terms of n/30 to all of its customers. Pronghorn Warehouse uses a periodic inventory system and at the end of June its inventory consisted of 33 suitcases purchased at $30 each. During the month of July, the following merchandising transactions occurred:

Record the July transactions for Pronghorn Warehouse.

July 1 Purchased 50 suitcases on account for $30 each from Trunk Manufacturers, terms n/30, FOB destination. 2 The correct company paid $165 freight on the July 1 purchase. 4 Received $150 credit for five suitcases returned to Trunk Manufacturers because they were damaged. 10 Sold 45 suitcases that cost $30 each to Satchel World for $55 each on account. 12 Issued a $275 credit for five suitcases returned by Satchel World because they were the wrong colour. The suitcases were returned to inventory. 15 Purchased 60 additional suitcases from Trunk Manufacturers for $31.50 each, terms n/30, FOB shipping point. 18 The company paid $180 freight on the July 15 purchase. 21 Sold 54 suitcases that cost $30 each to Fly-By-Night for $55 each on account. 23 Gave Fly-By-Night a $110 credit for two returned suitcases. The suitcases had been damaged and were sent to the recyclers. 30 Paid Trunk Manufacturers for the July 1 purchase. 31 Received balance owing from Satchel World.

Explanation / Answer

Particulars Amount Amount Purchase A/c Dr    1,500.00 To Trunk A/c Cr    1,500.00 Being Purchased from Trunk Manufacturer (50 units*Rs 30) Freight A/c dr       165.00 To Bank/Cash cr       165.00 (Being Freight paid) Trunk A/c Dr       150.00 To Purchase return A/c cr       150.00 (Being 5 units returned by trunk , 5unints *30) Satchel World A/c Dr    2,475.00 To sales cr    2,475.00 (Being Sales made to Satchel units 40 * Rs.55) Sales return a/c dr       275.00 Satchel World A/c cr       275.00 (Being sales has been returned Satchel 5 units*55) Purchase A/c Dr    1,890.00 To Trunk A/c Cr    1,890.00 (Being purchase made for 60units *Rs.31.50) Freight A/c Dr       180.00 To Bank/Cash Cr       180.00 (Being Freight paid) Fly by night Dr    2,970.00 To sales cr    2,970.00 (Being 54 units sold @ 55 each) Sales Return A/c Dr       110.00 Fly by night Cr       110.00 (Being sales returned by fly by night) Trunk A/c Dr    3,240.00 To cash/ Bank Cr    3,240.00 Being Cash paid to Trucnk (1500-150+1890) Bank/Cash Dr    2,200.00 To Satchel World A/c Cr    2,200.00 (Being Cash received towards sales from Satchel world Rs.2475- Rs.275 )

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