Adam Nichols, a former disc golf star, operates Adam’s Discorama. At the beginni

Question

Adam Nichols, a former disc golf star, operates Adam’s Discorama. At the beginning of the current season on April 1, the ledger of Adam’s Discorama showed Cash $1,800.00, Inventory $2,500.00, and Owner’s Capital $4,300.00. The following transactions were completed during April.

Apr. 5 Purchased golf discs, bags, and other inventory on account from Rayford Co. $1,100.00, FOB shipping point, terms 2/10, n/60. 7 Paid freight on the Rayford purchase $50.00. 9 Received credit from Rayford Co. for merchandise returned $100.00. 10 Sold merchandise on account for $840.00, terms n/30. The merchandise sold had a cost of $504.00. 12 Purchased disc golf shirts and other accessories on account from Galaxy Sportswear $620.00, terms 1/10, n/30. 14 Paid Rayford Co. in full, less discount. 17 Received credit from Galaxy Sportswear for merchandise returned $80.00. 20 Made sales on account for $680.00, terms n/30. The cost of the merchandise sold was $310.00. 21 Paid Galaxy Sportswear in full, less discount. 27 Granted an allowance to customers for clothing that was flawed$20.00. 30 Received payments on account from customers $840.00. Journalize the April transactions using a perpetual inventory system

Explanation / Answer

Journal Entries in the books of Adam Nichols using the perpetual inventory system Date Particulars Debit $ Credit $ 05-Apr Purchase A/c DR 1100 To Discount A/c 22 To Rayford A/c 1078 Inventory A/c DR 1100 To Purchase A/c 1100 07-Apr Freight A/c DR 50 To Cash/Bank A/c 50 09-Apr Rayford A/c DR 100 To Purchase Return A/c 100 Purchase Return A/c DR 100 To Inventory A/c 100 10-Apr Accounts Receivable A/c 840 To Sales A/c 840 Cost of Goods Sold A/c DR 504 To Inventory A/c 504 12-Apr Purchase A/c DR 620 To Discount A/c 6 To Galaxy Sportswear A/c 614 Inventory A/c DR 620 To Purchase A/c 620 14-Apr Rayford A/c DR 978 To Cash/Bank A/c 978 17-Apr Galaxy Sportswear A/c DR 80 To Purchase Return A/c 80 Purchase Return A/c DR 80 To Inventory A/c 80 20-Apr Accounts Receivable A/c 680 To Sales A/c 680 Cost of Goods Sold A/c DR 310 To Inventory A/c 310 21-Apr Galaxy Sportswear A/c DR 534 To Cash/Bank A/c 534 27-Apr Allowance A/c DR 20 To Accounts Receivable A/c 20 30-Apr Cash/Bank A/c DR 840 To Accounts Receivable A/c 840

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