Prepare the required journal entries for each transaction of Medieval Castles, I
ID: 2553530 • Letter: P
Question
Prepare the required journal entries for each transaction of Medieval Castles, Inc. using the perpetual inventory method. June 3 Purchased 250 play castles at a cost of $25 each on account with terms of 3/10, n/30. June 4 Paid $120 shipping costs from June 3 purchase. June 5 Sold 55 castles on account to Geneviere Blaylock for $45 each with terms 2/15, n/45. The castles had an original cost to Medieval Castles of $25 each. June 6 The wrong castles were sent to Geneviere Blaylock (the customer from June 5th). We agreed to give her an allowance of $80 for the error as she decided to keep them. June 13 Paid cash for June 3 purchase less the discount. June 15 Geneviere Blaylock (the customer from June 5th) paid cash for the amount owed from the sale less the allowance and discount. June 20 Sold 15 castles to Joan Arc for $45 each in cash. The castles had an original cost to Medieval Castles of $25 each. June 25 Purchased 100 castles at a cost of $25 each on account with terms n/30
. Date Description Debit Credit
Jun 3
Jun 4
Jun 5
Jun 6
Jun 13
Jun 15
Jun 20
Jun 25
Explanation / Answer
Journal entry
Date accounts & explanation debit credit June 3 Merchandise inventory (250*25) 6250 Account payable 6250 (To record merchandise purchase) June 4 Merchandise inventory 120 Cash 120 (To record shipping cost paid) June 5 Account receivable (55*45) 2475 Sales revenue 2475 Cost of goods sold (55*25) 1375 Merchandise inventory 1375 (To record credit sales and cost of goods sold) June 6 Sales return and allowance 80 Account receivable 80 (To record sales allowance) June 13 Account payable (250*25) 6250 Cash (6250*97%) 6062.50 Merchandise inventory (6250*3%) 187.50 (To record amount paid) June 15 Cash (2395*98%) 2347.10 Sales discount 47.90 Account receivable (2475-80) 2395 (To record amount received) June 20 Account receivable (15*45) 675 Sales revenue 675 Cost of goods sold (15*25) 375 Merchandise inventory 375 (To record sale and cost of goods sold) June 25 Merchandise inventory (25*100) 2500 Account payable 2500 (To record purchase)