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 $5,900. Freight charges of $750 were paid in cash. 2. John's returned some of the merchandise purchased in (1). The cost of the merchandise was $1,050 and John's account was credited by the supplier. 3. Merchandise costing $3,250 was sold for $6,100 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.)

Answer 1

Credit Date la Account Titles and Explanation Inventory Accounts Payable Debit 5,900 $ $ 5,900 1b 750 Freight Cash $ 750 02 $ 1,050 Accounts Payable Purchase returns and allowances $ 1,050 За $ 6,100 Cash Sales revenue $ 122 3b T$ 3,250 Cost of goods sold Inventory $ 3,250