Triple C is a PA hardware retailer. It prepares its accounting reccords on the a

Question

Triple C is a PA hardware retailer. It prepares its accounting reccords on the accrual basis under Generally Accepted Accounting Principles. It uses a perpetual inventory system. The following transactions have taken place during the month of April. Prepare the accounting entries in good journal entry form"

A. On April 15th, Triple C purchased inventory on account costing $75,000 which it expected to sell for $125,000 under terms of 1/10, n/30, which it paid one week later

B. During April, sales totaled $100,000. $50,000 were cash sales and $50,000 were on account

C. Triple C estimates its bad debt expense at 1% of sales

D. Accepted from customers the return of merchandise sold for cash for $1,000.

E. Received a debt memorandum with its bank statement as of April 30th for credit card processing costs of $1,089.

F. Was unable to locate the customer who wrote the bad check returned by the bank.

Explanation / Answer

No Account Title & Explaination Debit Credit A Inventory 75000 Account Payable 7500 B Cash 50000 Account Recievable 50000 Sale 100000 Cost of Good Sold (75000/125000*100000) 60000 Inventory 60000 c) Bad Debt Expenses (50000*1%) 500 Allowance for Doubtful Debt 500 d) Sales Return & Allowance 1000 cash 1000 Inventory 600 Cost of Good Sold (75000/125000*1000) 600 e) Bank Service Charge 1089 Cash 1089

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