Question

Sandhill Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May. Sandhills leder showed Cash of $7.900 and Common Stock of $7.900. May 1 Purchased merchandise on account from Black Wholesale Supply for $7.900, terms 1/10, 1/30. 2 Sold merchandise on account for $4,300, terms 2/10, 1/30. The cost of the merchandise sold was $3.200. 5 Received credit from Black Wholesale Supply for merchandise returned $200. 9 Received collections in full, less discounts from customers billed on May 2. 10 Paid Black Wholesale Supply in full, less discount. 11 Purchased supplies for cash $900. 12 Purchased merchandise for cash $3,000. 15 Received $230 refund for return of poor quality merchandise from supplier on cash purchase. 17 Purchased merchandise from Wilhelm Distributors for $2.400, terms 2/10,n/30 19 Paid freight on May 17 purchase $250. 24 Sold merchandise for cash $5.500. The cost of the merchandise sold was $4.100. 25 Purchased merchandise from Clasps Inc. for $800, terms 3/10,n/30. 27 Paid Wilhelm Distributors in full, less discount. 29 Made refunds to cash customers for returned merchandise $108. The returned merchandise had cost $98. 31 Sold merchandise on account for $1.280. terms n/30. The cost of the merchandise sold was 5864

Answer 1

Journal Entries using Perpetual Inventory System
Date	Account titles and Explanations	Debit	Credit
May,1	Inventory	7900
	To Accounts Payable		7900
	( Merchandise purchsaed on credit terms 1/10 , net 30
May,2	Account Receivables	4300
	To Sales		4300
	Merchandise sold at credit terms 2/10 , net 30
May,2	Cost of Goods Sold	3200
	To Inventory		3200
May ,5	Accounts Payable	200
	To Inventory		200
	Purchase return $ 200 recorded
May,9	Cash	4214
	Discount	86
	To Account Receivables		4300
	4300 less 2% = at $ 86 discount , balance received
May ,10	Accounts Payable	7700
	To Cash		7623
	To Discount received		77
	Net purchases of $ 7700 , paid at discount of 1%
May,11	Inventory	900
	To Accounts Payable		900
	Merchandise purchased in Cash
May,12	Inventory	3000
	To Accounts Payable		3000
	Merchandise purchased in Cash
May,15	Accounts Payable	230
	To Inventory		230
	Refund on return of poor quality purchase in cash
May,17	Inventory	2400
	To Accounts Payable		2400
	Purchase merchandise at payment terms 2/10 , net 30
May,19	Inventory	250
	To Accounts Payable		250
	Freight on Purchase paid
May,24	Cash	5500
	To Sales		5500
	Merchandise sold in cash
May,25	Inventory	800
	To Accounts Payable		800
	Purchase Merchandise at terms 3/10 , net 30
May,27	Accounts Payable	2400
	To Cash		48
	To Discount received		2352
	Wilhelm Distributors paid after discount of 2% as per terms ageed
May,29	Sales Return	108
	To Accounts Receivable		108
	Refund on cash sales return to Customers
May,29	Inventory	108
	To Cost of goods sold		108
May,31	Account Receivables	1280
	To Sales		1280
	Merchandise sold at credit terms n/30
May,31	Cost of Goods Sold	864
	To Inventory		864