Question

Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred. 9/6 Purchased calculators from Dragoo Co. at a total cost of $1,650, terms n/30. 9/9 Paid freight of $50 on calculators purchased from Dragoo Co. 9/10 Returned calculators to Dragoo Co. for $66 credit because they did not meet specifications. 9/12 Sold calculators costing $520 for $690 to Fryer Book Store, terms n/30. 9/14 Granted credit of $45 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $34. 9/20 Sold calculators costing $570 for $760 to Heasley Card Shop, terms n/30. Instructions: Journalize the September transactions.

Answer 1

Answer and Explanation:

The journal entries are shown below;

1. Inventory $1,650

Accounts Payable $1,650

(To record purchased on account)

2. Inventory $50

To Cash $50

(To record freight paid)

3. Accounts Payable $66

To Inventory $66

(To record the returned calculator)

4. Accounts Receivable $690

To Sales Revenues $690

(To record sales on the account)

5. Cost of Goods Sold $520

To Inventory $520

(To record cost of goods sold)

6. Sales returns $45

To Accounts Receivable $45

(To record the sales return)

7. Inventory $34

To Cost of Goods Sold $34

(To record the cost return)

8. Accounts Receivable $760

To Sales Revenues $760

(To record the sales on account)

9. Cost of Goods Sold $570

To Inventory $570

(To record the cost of goods sold)