Question

Date: Name: Unit III Accounting I Class: Date: 15. Record the following transactions for S Sparky's uses a perpetual inventory s scansactions for Sparky's Pet Shop using the general journal form provided below. Assume a perpetual inventory system. Omit transaction descriptions from entries: Date August 1 Transaction Purchased $6,000 of merchandise on account, terms 2/10, n/30. Returned $1.500 of merchandise purchased on August 1 due to defects. Recorded cash sales for the first week of August, $9,750; cost of the merchandise was $4,000. Made sale on account to a local breeder for $500, terms 1/10 net 30; cost of the merchandise was $200. Paid for the merchandise purchased on August 1, less return. Received payment from sale of August 10. The customer took the discount. 20

Answer 1

Journal Entries:

Date	Account Titles and Explanations	Debit	Credit
Aug. 1	Merchandise Inventory	$6,000
	Accounts Payable		$6,000
	(To record the purchase of merchandise inventory on account)
Aug. 3	Accounts Payable	$1,500
	Merchandise Inventory		$1,500
	(To record the return of the merchandise inventory on account)
Aug. 10	Cash	$9,750
	Sales Revenue		$9,750
	(To record the cash sales)
	Cost of Goods Sold	$4,000
	Merchandise Inventory		$4,000
	(To record the cost of goods sold)
Aug. 11	Accounts Payable ($6,000 - $1,500)	$4,500
	Cash		$4,500
	(To record the payment for the materials purchased on account)
Aug. 20	Cash ($9,750 - $97.50)	$9,652.50
	Discount Allowed ($9,750*1/100)	$97.50
	Accounts Receivable		$9,750
	(To record cash collections from customers for sales made on account)