Alpha Company uses the periodic inventory system for purchase & sales of merchan
ID: 2431498 • Letter: A
Question
Alpha Company uses the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchases & sales are, 2/10, n30 and the gross method is used. Unless otherwise noted, FOB Destination will apply to all purchases & sales. The value of inventory is based on periodic system. On January 1, 2016, beginning inventory consisted of 325 units of widgets costing $10 each. Alpha prepares monthly income statements. The following events occurred during the month of Jan.:
Date
Activity
a.
Jan. 3
Purchased on account 350 widgets for $11 each.
b.
Jan. 5
Sold on account 425 widgets for $30 each. Paid freight out with cash of $150.
c.
Jan. 10
Purchased on account 600 widgets for $12 each.
d.
Jan. 11
Shipping cost for the January 10 purchased merchandise was $400 was paid with a cheque by Alpha directly to the freight company.
e.
Jan. 12
Returned 25 widgets received from Jan. 10 purchase as they were not the correct item ordered.
f.
Jan. 13
Paid for the purchases made on Jan. 3.
g.
Jan. 21
Sold on account 550 widgets for $30 each. Paid freight out with cash of $250.
h.
Jan. 22
Authorize credit without return of goods for 50 widgets sold on Jan. 21 when customer advised that they were received in defective condition.
i.
Jan. 25
Received payment for the sale made on Jan. 5.
j.
Jan. 26
Paid for the purchases made on Jan. 10.
k.
Jan. 31
Received payment for the sale made on Jan. 21.
Use this information to prepare the General Journal entries (without explanation) for the January events. If no entry is required then enter the date and write "No Entry Required."
General Journal:
Date
Accounts
Debit
Credit
a.
1/3/16
Purchases
Accounts Payable
b.
1/5/16
Accounts Receivable
Freight Out
Cash
Sales
c.
1/10/16
Purchases
Accounts Payable
d.
1/11/16
Freight In
Cash
e.
1/12/16
Accounts Payable
Purchase Returns & Allowances
f.
1/13/16
Accounts Payable
Purchase Discounts
Cash
g.
1/21/16
Accounts Receivable
Freight Out
Cash
Sales
h.
1/22/16
Sales Return & Allowance
Accounts Receivable
i.
1/25/16
Cash
Accounts Receivable
j.
1/26/16
Accounts Payable
Cash
k.
1/31/16
Cash
Sales Discounts
Accounts Receivable
Date
Activity
a.
Jan. 3
Purchased on account 350 widgets for $11 each.
b.
Jan. 5
Sold on account 425 widgets for $30 each. Paid freight out with cash of $150.
c.
Jan. 10
Purchased on account 600 widgets for $12 each.
d.
Jan. 11
Shipping cost for the January 10 purchased merchandise was $400 was paid with a cheque by Alpha directly to the freight company.
e.
Jan. 12
Returned 25 widgets received from Jan. 10 purchase as they were not the correct item ordered.
f.
Jan. 13
Paid for the purchases made on Jan. 3.
g.
Jan. 21
Sold on account 550 widgets for $30 each. Paid freight out with cash of $250.
h.
Jan. 22
Authorize credit without return of goods for 50 widgets sold on Jan. 21 when customer advised that they were received in defective condition.
i.
Jan. 25
Received payment for the sale made on Jan. 5.
j.
Jan. 26
Paid for the purchases made on Jan. 10.
k.
Jan. 31
Received payment for the sale made on Jan. 21.
Explanation / Answer
Answer
Date
Accounts
Debit
Credit
a.
01-03-2016
Purchases
$ 3,850.00
Accounts Payable
$ 3,850.00
b.
01-05-2016
Accounts Receivable
$ 12,750.00
Freight Out
$ 150.00
Cash
$ 150.00
Sales
$ 12,750.00
c.
01-10-2016
Purchases
$ 7,200.00
Accounts Payable
$ 7,200.00
d.
01-11-2016
Freight In
$ 400.00
Cash
$ 400.00
e.
01-12-2016
Accounts Payable
$ 300.00
Purchase Returns & Allowances
$ 300.00
f.
1/13/16
Accounts Payable
$ 3,850.00
Purchase Discounts
$ 77.00
Cash
$ 3,773.00
g.
1/21/16
Accounts Receivable
$ 16,500.00
Freight Out
$ 250.00
Cash
$ 250.00
Sales
$ 16,500.00
h.
1/22/16
Sales Return & Allowance
$ 1,500.00
Accounts Receivable
$ 1,500.00
i.
1/25/16
Cash
$ 12,750.00
Accounts Receivable
$ 12,750.00
j.
1/26/16
Accounts Payable
$ 6,900.00
Cash
$ 6,900.00
k.
1/31/16
Cash
$ 14,700.00
Sales Discounts
$ 300.00
Accounts Receivable
$ 15,000.00
Date
Accounts
Debit
Credit
a.
01-03-2016
Purchases
$ 3,850.00
Accounts Payable
$ 3,850.00
b.
01-05-2016
Accounts Receivable
$ 12,750.00
Freight Out
$ 150.00
Cash
$ 150.00
Sales
$ 12,750.00
c.
01-10-2016
Purchases
$ 7,200.00
Accounts Payable
$ 7,200.00
d.
01-11-2016
Freight In
$ 400.00
Cash
$ 400.00
e.
01-12-2016
Accounts Payable
$ 300.00
Purchase Returns & Allowances
$ 300.00
f.
1/13/16
Accounts Payable
$ 3,850.00
Purchase Discounts
$ 77.00
Cash
$ 3,773.00
g.
1/21/16
Accounts Receivable
$ 16,500.00
Freight Out
$ 250.00
Cash
$ 250.00
Sales
$ 16,500.00
h.
1/22/16
Sales Return & Allowance
$ 1,500.00
Accounts Receivable
$ 1,500.00
i.
1/25/16
Cash
$ 12,750.00
Accounts Receivable
$ 12,750.00
j.
1/26/16
Accounts Payable
$ 6,900.00
Cash
$ 6,900.00
k.
1/31/16
Cash
$ 14,700.00
Sales Discounts
$ 300.00
Accounts Receivable
$ 15,000.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.