Ceres Computer Sales uses the perpetual inventory system and had the following t
ID: 2353521 • Letter: C
Question
Ceres Computer Sales uses the perpetual inventory system and had the following transactions during December. Answers may vary.DEC.1 Ceres SOLD merchandise to ABC, Inc. on cedit for $7,000, terms 2/10, n/30. The items sold had a cost of $2,500.
DEC.6 Ceres PURCHASED merchandise from Jones, Inc. on credit for $2,000, terms 1/10, n/30.
DEC.7 ABC, Inc. returned $700 of goods purchased on Dec.1 (original cost of the goods to ABC is$250).
DEC.11 ABC, Inc. pays amount owed from purchase on Dec.1 (within discount period).
DEC.12 Ceres receives an allowance of $200 for goods purchased on Dec.6.
DEC.14 Ceres pays for goods purchased on Dec.6 (within discount period).
Prepare the General Journal entries to record these transactions.
Explanation / Answer
DEC.1 Ceres SOLD merchandise to ABC, Inc. on cedit for $7,000, terms 2/10, n/30. The items sold had a cost of $2,500. 1 Dec Acct Rx Dr 7000 Sales Cr 7000 1 Dec Cost of goods sold Dr 2500 Merchandise inventory Cr 2500 DEC.6 Ceres PURCHASED merchandise from Jones, Inc. on credit for $2,000, terms 1/10, n/30. 6 Dec Merchandise inventory Dr 2000 Acct Payable Cr 2000 DEC.7 ABC, Inc. returned $700 of goods purchased on Dec.1 (original cost of the goods to ABC is$250). 7 Dec Sales Return Dr 700 Acct Raxable Cr 700 7 Dec Merchandise inventory Dr 250 COGS Cr 250 DEC.11 ABC, Inc. pays amount owed from purchase on Dec.1 (within discount period). 11 Dec Cash Dr $6,174 Sales Disc Dr 126 ACct Raxbale Cr 6300 (Disc 2%*6300 = 126 allowed) DEC.12 Ceres receives an allowance of $200 for goods purchased on Dec.6. 12 Dec Acct Payable Dr 200 Purch Allow Cr 200 DEC.14 Ceres pays for goods purchased on Dec.6 (within discount period). 14 Dec Acct Payable Dr 1800 Purch Disc Cr 18 Cash Cr 1782 (1% of (2000-200) = 1%*1800 = 18)