A company had the following transactions during December: 12/1 Sold computers fo
ID: 2542430 • Letter: A
Question
A company had the following transactions during December:
12/1 Sold computers for $5,000, terms 4/10, n/30. The items sold had a cost of $3,500.
12/2 Purchased wireless routers for cash, $720.
12/4 Purchased printers for $2,600, terms 1/20, n/30.
12/5 The customer returned half of the computers purchased.
12/10 Paid cash for freight charges of $200 for printers purchased on 12/4.
12/10 Received payment for computers sold 12/1.
12/11 Returned faulty printers purchased on 12/4 for $600.
12/17 Paid for the printers purchased 12/4.
12/18 Sold all wireless routers purchased for $1,000 cash.
12/19 Sold all of the printers for $2,800, terms 2/10, n/30.
12/30 Received cash for the printers sold.
----Prepare the journal entries to record these transactions using a perpetual inventory system.
Explanation / Answer
Journal entries to recird the transactions
12/1 - Customer a/c dr 5000
To computer 3500
To profit on sale 1500
(Being computers sold on profit on credit basis)
12/2 - wireless router a/c dr 720
To cash. 720
(Purchased touter for cash)
12/4- Printer a/c Dr 2600
To supplier 2600
(Purchased printer for credit)
12/5 - Profit on sale a/c Dr 750
Computer a/c Dr 1750
To customer 2500
(Half of computers sold has been returned .hence half profit also reversed)
12/10 - Freight charges a/c Dr 200
To cash 200
(Being freight charges paid in cash)
12/10 - Cash a/c Dr 2500
To customer 2500
(As the payment has been received after 30 days there is no discount hence the pending payment received from customer)
12/11 - Supplier a/c Dr 600
To printer 600
(Faulty printers returned back)
12/17 - Supplier a/c Dr 2000
To cash 1980
To discount received 20
(Paid for the printer and discount of 1% received as the payment has been done within 30days)
12/18 - Cash a/c Dr 1000
To wireless routers 1000
(Wireless routers sold for cash)
12/19 - Customer a/c Dr 2800
To printer 2800
(Sold all printers to customer on credit)
12/30 - Cash a/c Dr 2800
To customer 2800
(As the payment has been received after 10days there is no discount and hence full amount received)
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