Question

Part 5 Journalizing purchase and sale transactions, making closing entries, preparing financial statements, and computing the gross profit percentage

      Hudson Cleaning has decided that, in addition to providing cleaning services, it will sell cleaning products. Hudson Cleaning uses the perpetual inventory system. During December 2018, Hudson Cleaning completed the following transactions:

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Dec 2.   Purchased 600 units of inventory for $3,600 on account from Sparkle, Co. on terms,

3/10, n/20

Purchased 400 units of inventory from Borax on account with terms 4/5, n/30. The total invoice was for $3,200, which included a $200 freight charge.

7.   Returned 100 units of inventory to Sparkle from the December 2 purchase (cost $600).
9.   Paid Borax
11. Sold 350 units if goods to Happy Maids for $4,900 on account with terms 5/10, n/30.

      Hudson Cleaning’s cost of goods was $2,100

12. Paid Sparkle.

15. Received 30 units with a retail price of $420 of goods back from customer Happy

      Maids. The goods cost Hudson Cleaning $180

21. Received payment from Happy Maids, settling the amount due in full.

28. Sold 200 units of goods to Bridget, Inc. for cash of $3,000 (cost $1,144 $1,500).

29. Paid cash for utilities $350

30. paid cash for Sales Commission Expense of $225

31. Record the following adjustment entries:

Physical count of inventory on December 31 showed 350 380 units of goods on hand, $2,541

Depreciation, $170

Accrued salaries expense of $700

Prepared all other adjustments necessary for December (Hint: You will need to review the adjustment information in Chapter 3 to determine the remaining adjustments). Assume the cleaning supplies left at December 31 are $50.

Answer 1

The journal entries are provided in below attachment

Thanks

Credit Debit 3,600 $ $ 3,600 $ 3,200 $ 3,200 $ 600 $ 600 $ 3,200 $ 3,200 $ 4,900 $ 4,900 JOURNAL ENTRIES IN THE BOOKS OF HUDSON CLEANING Date Particulars Dec-02 Inventory To Account Payable (Sparkle) (To record purchase of inventory on credit) Dec-02 Inventory To Account Payable (Borax) (To record purchase of inventory on credit) Dec-07 Account Payable (Sparkle) To Inventory (To record return of inventory) Dec-09 Account Payable (Borax) To Cash/ Bank (To record settlement to Borax without availing discount as payment made after 5 days) Dec-11 Account Receivable (Happy Maids) To Sales (To record sales made on credit) Dec-11 Cost of Goods Sold To Inventory (To record cost of goods sold on sales made to Happy Maids) Dec-12 Account Payable (Sparkle) (3,600-600) To Cash (To record payment to Sparkle without availing discount as 10 days elapsed while making payment) Dec-15 Sales returns (Net off with Sales) To Account Receivable (Happy Maids) (To record sales returns) Dec-15 Inventory To Cost of Goods Sold (To record cost of goods sold reversal on sales returns) Dec-21 Cash/ Bank To Account Receivable (Happy Maids) (To record settlement of account payables without giving discount as Happy Maids paid after 10th day) $ 2,100 $ 2,100 $ 3,000 $ 3,000 $ 420 $ 420 $ 180 $ 180 $ 4,480 $ 4,480

$ 3,000 $ 3,000 No clarity in question regarding Cost of goods sold. $ 2,644 $ 2,644 Two amounts are given $1,144 and $1,500. I took total of both as $2,644 $ 350 $ 350 225 $ 225 Dec-28 Account Receivable (Bridget Inc) To Sales (To record sales made on credit) Dec-28 Cost of Goods Sold To Inventory (To record cost of goods sold on sales made to Bridget Inc) Dec-29 Utilities To Cash/Bank (To record utlities payment) Dec-30 Sale Commission Expense To Cash (To record payment of sales commission expense) ADJUSTING ENTRIES Dec-31 Depreciation Expenses To Accumulated Depreciation (To record depreciation) Dec-31 Loss on inventory To Inventory (To record difference of 30 inventory in physical check) Dec-31 Salary Expense To Accrued Salary Expense (To record accrued salary) $ 2,541 $ 2,541 $ 170 $ 170 $ 700 $ 700