Question

Pina's Discorama. At the beginning of the current season on April 1, the ledger of Pina's Disco Owner's Capital $4,500. The following transactions were completed during April 

Apr. 5 Purchased golf discs, bags, and other inventory on account from Mumford Co. $1,200, FOB shipping point, terms 2/10, 1/60. 

7 Paid freight on the Mumford purchase $40. 

9 Received credit from Mumford Co. for merchandise returned $200. 

10 Sold merchandise on account for $920, terms /30. The merchandise sold had a cost of $552 

12 Purchased disc golf shirts and other accessories on account from Saucer Sportswear $675, terms 1/10, 1/30, 

14 Paid Mumford Co. in full, less discount. 

17 Received credit from Saucer Sportswear for merchandise returned $75. 

20 Made sales on account for $610, terms 1/30. The cost of the merchandise sold was $400. 

21 Paid Saucer Sportswear in full, less discount. 

27 Granted an allowance to customers for clothing that was flawed $20. 

30 Received payments on account from customers $900. 

The chart of accounts for the store includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Account Revenue, No. 412 Sales Returns and Allowances, and No. 505 Cost of Goods Sold.

(a) Journalize the April transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount journal entries in the order presented in the problem.) 

Answer 1

Journal Entries:

Date	Account title and Explanation	Debit	Credit
Apr.5	Inventory	$1,200
	Accounts payable		$1,200
	[To record purchase of inventory on account]
Apr.7	Inventory	$40
	Cash		$40
	[To record payment of freight]
Apr.9	Accounts payable	$200
	Inventory		$200
	[To record purchase returns]
Apr.10	Accounts receivable	$920
	Sales revenue		$920
	[To record sales on account]
	Cost of goods sold	$552
	Inventory		$552
	[To record cost of goods sold]
Apr.12	Inventory	$675
	Accounts payable		$675
	[To record purchase of inventory on account]
Apr.14	Accounts payable [$1,200-$200]	$1,000
	Inventory [$1,000 x 2%]		$20
	Cash		$980
	[To record cash paid for accounts payable]
Apr.17	Accounts payable	$75
	Inventory		$75
	[To record purchase returns]
Apr.20	Accounts receivable	$610
	Sales revenue		$610
	[To record sales on account]
	Cost of goods sold	$400
	Inventory		$400
	[To record cost of goods sold]
Apr.21	Accounts payable [$675-$75]	$600
	Inventory [$600 x 1%]		$6
	Cash		$594
	[To record cash paid for accounts payable]
Apr.27	Sales returns and allowance	$20
	Accounts receivable		$20
	[To record allowance given]
Apr.30	Cash	$900
	Accounts receivable		$900
	[To record cash collections from customers]