September I.) Charlie Company uses a perpetual inventory system. During May, the

Question

September I.) Charlie Company uses a perpetual inventory system. During May, the following transactions and events occurred. May 13 Sold 8 motors at a cost of $45 each to Scruffy Brothers Supply Company, May 16 One defective motor was returned to Charlie. May 23 Received payment in full from Scruffy Brothers. Round to nearest dollar Instructions terms 4/10, n/30. The motors cost Charlie $26 each. 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 that were defective. 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. Instructions Journalize the September transactions for Reid Supply.

Explanation / Answer

May 13 Account Receivable($45×8) $360 Sales revenue $360 Cost of good sold($26×8) $208 Inventory $208 May 16 Sales returns and allowances $45 Account receivable $45 Inventory $26 Cost of good sold $26 May 23 Cash $302 Sales discounts($315×.04) $13 Account receivable(360-45) $315

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