Super Copy Co. is an office supply store. The company uses a perpetual inventory

Question

Super Copy Co. is an office supply store. The company uses a perpetual inventory system, records purchases at net cost, and records sales revenue at full invoice price. Record the following transactions in the company's general journal. To conserve space, omit the written explanations which normally should accompany the entries. July 1 Purchased four Doni copying machines on account from Doni Corp. Total invoice price was $4,000 per machine ($16,000 total); terms of 2/10, n/30. These machines are intended for resale. 3 Found one of the Doni copiers to be defective and returned it to Doni, thus reducing the amount owed. 9 Sold one of the Doni copiers to Cross Realty. The sales price was $5,000, terms 5/10, n/60. 10 Paid the remaining amount owed to Doni Corp., less the allowable discount. 19 Received full payment from Cross, less the allowable discount.

Explanation / Answer

Journal entries:

To Cash

(15,680 - $3920)

Date Description Debit Credit July 1 Inventory $15,680 To Accounts payable $15,680 July 3 Accounts payable $3920 To Inventory $3920 July 9 Accounts recievable $5,000 To Sales $5,000 Cost of goods sold $3920 To inventory $3920 July 10 Accounts payable $11,760

To Cash

(15,680 - $3920)

$11,760 July 9 Cash $4750 Discount expense    250 To A/c recievable $5,000

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