John’s Specialty Store uses a perpetual inventory system. The following are some
ID: 2568697 • Letter: J
Question
John’s Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May 2018: John’s purchased merchandise on account for $6,500. Freight charges of $1,050 were paid in cash. 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. 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
1) Purchase DR. 6500
Supplier CR. 6500
2) Freight DR.1050
Cash CR. 1050
3) Supplier DR. 1350
Purchase Return CR. 1350
4)Cash DR. 6700
Sales CR. 6700