Question

Unite Inc. maintains a periodic inventory system and uses the gross method to record purchases. The following transactions occurred during the month of March 2020 for its major inventory line.

a. Purchase of merchandise inventory on March 1, 2020, for $14,400 on account, terms 1/10, n/30.

b. Paid $144 cash for freight charges on March 1, 2020, related to the purchase.

c. Returned $108 of merchandise on March 5, 2020, and received a credit from the vendor.

d. Paid the balance due to the vendor on March 8, 2020.

e. Sold merchandise inventory on March 15, 2020, for $9,000.

Prepare journal entries for transactions a through e.

Note: Round your answers to the nearest whole dollar.

Answer 1

	Journal Entries
	Date	Account Title	Debit	Credit
	March 01,2020	Purchases /Cost Of Good Sold	$14400
		Account Payable		14400
		(Inventory purchased)
	March 01,2020	Cost Of Good Sold	144
		Cash		144
		(Frieght paid in cash for buying inventory)
	March 05,2020	Account Payable	108
		Purchases		108
		(purchase return)
	March 08,2020	Account Payable	14292
		Cash		14149
		Cash Discount Received		143
		[14400-108]*99% =14149
		Discount = 14292-14149 =$143
	March 15,2020	Account Receivable / Cash	9000
		Sales		9000
		(goods sold )
		(Note : In the question whether good sold on credit or cash has not given
		hence student can assume either cash / account receivable option)