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.

Sept. 6 Purchased calculators from Carla Vista Co. at a total cost of $1,800, terms n/30.
9 Paid freight of $50 on calculators purchased from Carla Vista Co.
10 Returned calculators to Carla Vista Co. for $51 credit because they did not meet specifications.
12 Sold calculators costing $460 for $670 to Fryer Book Store, terms n/30.
14 Granted credit of $40 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $28.
20 Sold calculators costing $560 for $780 to Heasley Card Shop, terms n/30.

Prepare the journal entriy for the Office Depot.

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Inventory Dr, $1,800

To accounts payable $1,800

(Being purchase of calculators on account is recorded)

2. Inventory Dr, $50

To cash $50

(Being inventory is recorded)

3. Accounts payable Dr, $51

To inventory $51

(Being return of calculators is recorded)

4. Accounts Receivable $670

To Sales revenue $670

(Being sales revenue is recorded)

5. Cost of Goods Sold Dr, $460

To Inventory $$460

(Being cost of goods sold is recorded)

6. Sales returns Dr, $40

To Accounts receivable $40

(Being goods returned by customer is recorded)

7. Inventory Dr, $28

To Cost of Goods Sold $28

(Being cost of goods sold returned is recorded)

8. Cost of Goods Sold Dr, $780

To Sales revenue $780

(Being cost of goods sold is recorded)

9. Cost of Goods Sold Dr, $560

To inventory $560

(Being cost of goods sold is recorded)