Question

S Wayandt, Accounting Principles, 130 Help System CALCULATOR PRINTER VERSION LACK ND Brief Exercise 192 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 Scrutty Brothers Supply Company, termo 4/10, 1/30. The motors cost Charle $26 each. May 16 One defective motor was returned to Charlie May 23 Received payment in full from Scrurly Brothers Journalize the May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system. (Credit account tities are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit (To record credit sale.) (To record cost of good sold.) (To record goods retumed.)

Answer 1

Credit Journal Entry using Perpetual Method Date General Journal May 13 Accounts receivable (8*$45) Sales (To record credit sales) Debit $360 $360 May 13 $208 Cost of good sold (8* 26) Merchandise Inventory (To record cost of good sold) $208 May 16 $45 Sales return and allowances Accounts receivable (To record goods returned) $45 May 16 $26 Merchandise Inventory Cost of good sold (To record cost of goods returned) $26 $302 13 $315 May 23 Cash Sales Discount Accounts receivable (To recognize payment less Discount) Working note: Accounts Receivable $360 Less: Sales Return (45) Net Accounts Receivable $315 Sales Discount 4% of $315 $12.60 $13 (rounded)