Assuming the perpetual inventory system is utilized; prepare the journal entries

Question

Assuming the perpetual inventory system is utilized; prepare the journal entries to record the following transaction for Summer Jewelers. April 2 Summer received an invoice for $20,000 from one of its merchandise suppliers. Terms were 2/10, n/30 FOB shipping point Summer paid transportation cost on the April 2nd purchase, $1,200. Summer returned $3,400 of the merchandise billed on April 2nd because it was defective. Summer sold merchandise on account to Charles Simpson Jewelers for $9,000. Terms were 3/15, n/30 FOB destination. Summer's cost for this merchandise was $3,000. Summer paid transportation cost on the April Sth sale, $500 Summer paid the invoice dated April 2nd, less the return and the discount. Charles Simpson Jewelers returned $3,000 of the merchandise from the April 5th sale. 10 15 Summer's cost for this merchandise was $1,000. 19 Summer received payment on the remaining amount due from Charles Simpson Jewelers, less the return and the discount 25 30 Paid rent, $1,500. Paid part-time salesperson wages, $1,200. Please use these Beginning Balances for March 31, 2017 S Cash Estimated Returns Inventory Refunds Payable Capital 35,000 2,000 6,000 31,000 Requirements: 1. Journalize Summer Jewelers' April transactions.

Explanation / Answer

1. In the books of Summer Jewellers:

Date Account Titles Debit Credit April $ $ 2 Inventory 20,000 Accounts Payable 20,000 3 Inventory 1,200 Cash 1,200 4. Accounts Payable 3,400 Inventory 3,400 5. Accounts Receivable 9,000 Sales Revenue 9,000 Cost of Goods Sold 3,000 Inventory 3,000 8 Freight-out 500 Cash 500 10 Accounts Payable 16,600 Cash 16,268 Inventory 332 15 Sales Returns and Allowances 3,000 Accounts Receivable 3,000 Inventory 1,000 Cost of Goods Sold 1,000 19 Cash 5,820 Sales Discounts 180 Accounts Receivable 6,000 25 Wages Expense 1,200 Cash 1,200 30 Rent Expense 1,500 Cash 1,500

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