Print Find a Record each as a Journal Entry Warsen Windows uses a perpetual inve

Question

Print Find a Record each as a Journal Entry Warsen Windows uses a perpetual inventory system. Record each of the following transactions related to Warsen's purchasing and selling of merchandise. Oct. 1 Purchased merchandise from Davis Company for $40,000 with terms 3/10 n/30 5 Paid $800 for freight on the October 1st purchase. 7 Returned merchandise costing $6,800 for full credit 10 Paid Davis for the merchandise purchased on October 1st 12 Sold merchandise to Randall Designs at a selling price of $28,000; terms 2/10 n/30. The goods cost Warsen $16,800. Received a return of $4,000 of the merchandise Randall purchased on the 12th, The returned items had cost Warsen $2,400 Collected Randall's account balance in full. 15 20

Explanation / Answer

Journal Entries (Amount in $)

Date Account Title and Explanation Debit    Credit   Oct. 1 Inventory 40,000 Accounts Payable 40,000 (Purchase merchandise with 3/10, n/30 terms) Oct. 5 Inventory 800 Cash 800 (Paid freight on October 1 purchase) Oct.7 Accounts Payable 6,800 Inventory 6,800 (Returned Merchandise from October 1 purchase) Oct.10 Accounts Payable 40,000 Discount Received (40,000*3%) 1,200 Cash (40,000-1,200) 38,800 (Paid for merchandise purchased on october 1 within the discount period) Oct.12 Accounts Receivable 28,000 Sales 28,000 (To record revenue from sale of merchandise) Oct.12 Cost of goods sold 16,800 Inventory 16,800 (To record cost of merchandise sold and to reduce inventory) Oct.15 Sales Returns 4,000 Accounts Receivable 4,000 (To record sales return by customer) Oct.15 Inventory 2,400 Cost of goods sold 2,400 (To record cost of goods returned by customer) Oct.20 Cash (24,000-480) 23,520 Discount Allowed [(28,000-4,000)*2%] 480 Accounts Receivable (28,000-4,000) 24,000 (To record receipt of cash from customer within the discount period)

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