Question

John's Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May. 1. John's purchased merchandise on account for $5,500. Freight charges of $550 were paid in cash. 2. John's returned some of the merchandise purchased in (1). The cost of the merchandise was $850 and John's account was credited by the supplier. 3. Merchandise costing $3,050 was sold for $5,700 in cash. Required: Prepare the necessary journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 Record the cost of goods sold for $3,050. Note: Enter debits before credits Transaction General Journal Debit Credit Prav 1 of 4 5 Next > i de

Answer 1

1. Record the merchandise purchased on account
Transaction	General Journal	Debit	Credit
01	Inventory	$5,500
	Accounts Payable		$5,500
	(To record purchase of merchandise on credit)
2. Record the freight charges
Transaction	General Journal	Debit	Credit
02	Inventory	$550
	Cash		$550
	(To record freight charges)
3. Record the return of merchandise
Transaction	General Journal	Debit	Credit
03	Accounts Payable	$850
	Inventory		$850
	(To record the return of Merchandise)
4. Record the sales of merchandise
Transaction	General Journal	Debit	Credit
04	Cash	$5,700
	Sales revenue		$5,700
	(To record cash sales)
5. Record the cost of goods sold
Transaction	General Journal	Debit	Credit
05	Cost of Goods Sold	$3,050
	Inventory		$3,050
	(To record cost of goods sold)