Question

Sundance systems has the following transactions during July.

July 5- Purchases 58 LCD televisions on account from Red River Supplies for $3,400 each, terms 2/10. n/30.
July 8- Returns to Red RIver two televisions that had detective sound.
July 13- Pays the full amount due to Red River.
July 28- Sells remaining 56 televisions purchased on July 5 fpr $3,900 each on account.Record the transactions of Sundance systems, assuming the company uses a perpetual inventory system.

Answer 1

Answer: Please see below for answers

Step-by-step explanation:

Journal to record Purchase of goods.

Date General Journal Debit Credit

5TH July Inventory ( 58 x 3400) $197, 200

Accounts Payable $197,200

journal to record goods returned

Date General Journal Debit Credit

8TH July Accounts Payable (2 x 3400) $6,800

inventory $ 6,800

journal to record payment made to supplier

Date General Journal Debit Credit

13TH July Accounts Payable (197,200-6,800) $190,400

inventory ( 190,400 x2%) $3808

Cash( 190,400 - 3,808) $186,592

From the question, the conditions for payment states 2/10 and n/30 meaning that the company will get 2% discount if they pay for products in 10 days of payment. the company paid on 13th and therefore will get a discount which is $3,808.

journal to record sale of goods

Date General Journal Debit Credit

28TH July Accounts receivable(56x 3900) $218,400

Sales revenue $218,400

Journal to record cost of good sold

Date General Journal Debit Credit

28TH July cost of good sold $186,592

inventory $186,592