2. A company has the following transactions during April: April 3 Purchases inve

Question

2. A company has the following transactions during April: April 3 Purchases inventory on account for $3,800, terms 3/10, n/30. April 4 Pays $200 to Shipping Right Co. for delivery April 6 Returns inventory with a cost of $400. April 12 Pays the amount due on April 3 purchase. April 29 Sells all inventory purchased on April 3 (less those returned on April 6) for $7,000 on account. April 30 Records Cost of Goods sold for the month. There is no beginning or ending inventory Record all transactions assuming the company uses a periodic inventory system. DateAccount April 3 Debit Credit April 4 April 6 April 12 April 30 April 30

Explanation / Answer

3-Apr Purchases $ 3,800 Accounts payable $ 3,800 (To record purchase) 4-Apr Freight charges $     200 Cash $     200 (To record shipping expenses) 6-Apr Accounts payable $     400 Purchase return $     400 (To record purchase return) 12-Apr Accounts payable ($3,800-$400)*97%) $ 3,298 Purchase discount ($3,800-$400)*3%) $     102 Cash $ 3,400 29-Apr Accounts receivable $ 7,000 Sales $ 7,000 (To record sales) 30-Apr Cost of goods sold $ 3,400 Purchases $ 3,400 (To record cost of goods sold)

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