1.) Charlie Company uses a perpetual inventory system. During May, the following

Question

1.) Charlie Company uses a perpetual inventory system. During May, the following transactions and events occurred. Sold 8 motors at a cost of $45 each to Scruffy Brothers Supply Company, terms 4/10, n/30. The motors cost Charlie $26 each. May 13 May 16 One defective motor was returned to Charlie. May 23 Received payment in full from Scruffy Brothers. Round to nearest dollar. Instructions Journalize the May transactions for Charlie Company 2) On September 1, Reid Supply had an inventory of 15 backpacks at a cost of $20 each. The company uses a perpetual inventory system. During September, the following transactions and events occurred. Sept. 4 Purchased 70 backpacks at $20 each from Hunter, terms 2/10, n/30 Sept. 6 Received credit of $100 for the return of 5 backpacks purchased on Sept. 4 Sept. 9 Sold 40 backpacks for $35 each to Oliver Books, terms 2/10, n/30. Sept. 13 Sold 15 backpacks for $35 each to Heller Office Supply, terms n/30. Sept. 14 Paid Hunter in full, less discount. that were defective. Instructions Journalize the September transactions for Reid Supply.

Explanation / Answer

1) Journal entry :

Date accounts & explanation debit credit May 13 Account receivable a/c (8*45) 360 Sales revenue a/c 360 Cost of goods sold a/c (8*26) 208 Merchandise inventory a/c 208 (To record sales and cost of goods sold) May 16 Sales return and allowance a/c 45 Account receivable /c 45 Merchandise inventory a/c 26 Cost of goods sold 26 (To record sales return) May 23 Cash a/c (315*96%) 302 Sales discount a/c (315*4%) 13 Account receivable a/c 315 (To record received payment)

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