Exercise 8-2 Periodic inventory system; journal entries [L08-1] John\'s Specialt
ID: 2555988 • Letter: E
Question
Exercise 8-2 Periodic inventory system; journal entries [L08-1] John's Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May 2018: 1. John's purchased merchandise on account for $6,500. Freight charges of $1,050 were paid in cash. 2. John's returned some of the merchandise purchased in (1). The cost of the merchandise was $1,350 and John's account was credited by the supplier 3. Merchandise costing $3,550 was sold for $6,700 in cash. Required: Prepare the necessary journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)Explanation / Answer
In the books of John's Speciality Store:
Transaction General Journal Debit Credit $ $ 01 Purchase 6,500 Accounts Payable 6,500 01 Freight-in 1,050 Cash 1,050 02 Accounts Payable 1,350 Purchase Returns 1,350 03 Cash 6,700 Sales Revenue 6,700 03 No entry required for cost of goods sold.