Question

Myers entered into the transactions listed below. Select the journal entries the transactions for 18. using the perpetualinventory system.

       (1) 4/3 Purchased $1,300 of merchandise inventory (1,300 units @ $1 each) on account.

(2) 4/6   Returned 300 units,due to defects.

       (3) 5/1    Sold 600 units for $1,200 on account.

       (4) 5/3    Accepted a return of 200 units, due to damage.

       (5) 5/31 End of month calculation of ending inventory and cost of goods sold. If no calculation necessary,

        note as such.(a physical inventory revealed $600 inventory on hand)

Question 18 options:

	5/3 Sales Ret 400 A/R 400 Inventory 200 CGS 200
	5/3 Sales Ret 400 A/R 400
	5/3 CGS 400 Inventory 60 Pur Returns 300 Purchases 1,300
	5/31 No entry
	4/6 A/P 1,300 Pur Returns 1,300
	5/1 A/R 1,200 Sales 1,200 CGS 600 Inventory 600
	5/1 A/R 1,200 Sales 1,200
	4/3 Inventory 1,300 A/P 1,300
	4/6 A/P 1,300 Inventory 1,300
	4/3 Purchases 1,300 A/P 1,300

Answer 1

Trnasaction 1:
	(1) 4/3 Purchased $1,300 of merchandise inventory (1,300 units @ $1 each) on account.
Solution:
	Journal Entries
	Date	Account Title and explanation	Debit	Credit
	4/3	Inventory	$1,300
		Account Payable		$1,300
Trnasaction 2:
	(2) 4/6   Returned 300 units,due to defects.
Solution:
	Journal Entries
	Date	Account Title and explanation	Debit	Credit
	4/3	Account Payable	$300
		Inventory		$300
Trnasaction 3:
	(3) 5/1    Sold 600 units for $1,200 on account.
Solution:
	Journal Entries
	Date	Account Title and explanation	Debit	Credit
	5/1	Account Receivable	$1,200
		Sales Revenue		$1,200
		CGS	$600
		Inventory		$600
Trnasaction 4:
	(4) 5/3    Accepted a return of 200 units, due to damage
Solution:
	Journal Entries
	Date	Account Title and explanation	Debit	Credit
	5/1	Sales Return	$400
		Account Receivable		$400
		Inventory	$200
		CGS		$200
Trnasaction 5:
	(5) 5/31 End of month calculation of ending inventory and cost of goods sold.
		Ending inventory:
		Purchase	$1,300
		Less: Return	$300
		Less: Sold	$600
		Add: Sales Return	$200
		Ending inventory	$600
		Cost of Goods Sold
		Material Sold	$600
		Less: Sales Return	$200
		Net Cost of Goods Sold	$400
		Cost of Goods Sold = $ 4,00