Question

First Choice Ltd. completed the following merchandising transactions in the month of May 2018. At the beginning of May, First Choice’s ledger showed Cash $6,400; Accounts Receivable $1,300; Inventory $3,200; Common Shares $8,600; and Retained Earnings $2,300. First Choice uses a perpetual inventory system.

May	1		Purchased merchandise on account from Depot Wholesale Supply Ltd. for $5,200, terms 1/10, n/30, FOB shipping point.
	3		Freight charges of $150 were paid by the appropriate party on the merchandise purchased on May 1.
	4		Sold merchandise on account to Ry Company for $3,200, terms 2/10, n/30, FOB destination. The cost of the merchandise was $2,300.
	7		Freight charges of $90 were paid by the appropriate party on the May 4 sale.
	8		Received a $200 credit from Depot Wholesale Supply when merchandise was returned.
	9		Paid Depot Wholesale Supply in full.
	11		Purchased supplies for $500 cash.
	14		Received payment in full from Ry Company for merchandise sold on account on May 4.
	15		Collected $1,000 of the accounts receivable outstanding at the beginning of the month. All accounts were originally sold on terms of n/30, with no sales discounts.
	18		Purchased merchandise from Harlow Distributors Inc. for $2,000, terms n/30, FOB destination.
	21		Freight of $50 was paid by the appropriate party on the May 18 purchase of merchandise.
	22		Sold merchandise to various customers for $7,100 cash. The cost of the merchandise was $3,900.
	29		Paid a $100 cash refund to customers for returned merchandise. The cost of the returned merchandise was $50. It was restored to inventory.
	31		A physical inventory count was taken and determined that there was $3,900 of inventory on hand. Prepare any adjustment required.

Record the May transactions. (Credit account titles are outomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account tities and enter for the amounts. Round answers to the nearest whole dollar.eg. 5,275.) Debit Credit Date Account Titles and Explanation May 1 (Sale of goods on account) (Cost of goods sold recorded) (Sale of goods) (Cost of goods sold recorded) (Return of merchandise) (Return of merchandise, assuming goods are resaleable and returned to inventory)

Answer 1

Refer below images for the above mentioned questions, in a detailed way of solution.

Solution : Requirement @ : journal entries Debit Credit Date nay I particolars Inventory Al To Accounts 45200 or payable $ 5200 or Inventory ak To cash Ale Alc. or $3200 Accounts To Receivable sales $ 3200 cost $ 2300 Ale or of To goods sold Inventory 42300 all or $90 Freight out To cash $90 Ar $ 200 Accounts To payable All Inventory $200 Dr $ 5000 Accounts payable ($5200 - $200) Al To Inventory (15000 4 11 ) To cash alc. $50 14950 Dr. supplies All as 500 To cost Alc $500 cash ($3200-164 All or Sales Discounts ($3200x24.) All Dr Go Accounts Receivable 3136 $64 200

Debit credit Date Particulars $1000 cash ale Go Accounts or Recevoble $ 1000 or $ 2000 Inventory ale To Accounts 2000 payable paid Mayal No entry required (freight by Harlow) cash Al or $ 7100 $7100 To sales ale or $ 3900 cost $3900 of goods sold To Inventory SLOO alc or and allowances Sales 29 $ 100 returns To cash 4.90 Inventory al or To cost of goods sold Cost $200. of goods sold Ale or $aro To Inventory ($4150 - 43900) = $250 Shortgage. & unadjusted balance in inventory account: $3200 45200 + $ 150 - $2300 - 4200- & Jo + $ 2000 - $ 3900 & 9 5o = $4150

Requirertent (b): Cash Al May 1 Bal. $6400 3 НЧ 19 $ 2136 | hot го і зьоо | 4 9 Пң 22 $ ә 160 1No 4 40 5 445 Dr Accounts Receivable 1- 1- Qad floo 19 104 ч $3200 на 1 я забо $ тоо гон 1 | tay 29 g Coo 4 too ro4 25 Јоо По-1 34 •34. $ 396 Dr ... 1041 - ad 4 or 3 оросу f 500 Mayin Inventory f3 доо 14 ч Ну 1 $/гоо кеу 1 ny 3 $1 то 144 оо ray 3 з noy 29 яко нау 1 r10 11 1 а 100 4 2оо 9 So 5 3900 gejo Map] 3 TOO Bd Too May Jud. $3900 | or - CY Common Stock 40ad ggoo or Accounts payable or пах ч 4 гоо ч 1 $ (до Haga 5000 may it $2000 Пчі 04 - у 3600 Нез 31 B. 2000 or sales returns Sales & Allowances - CY 1 x $ 400 гуан ч Р 32оо o 22 200 too г) 31 ny 71 - 34. Х 10 Зоо g

DX Sales Discounts Fekr of May 14 8 64 pr may 7 190 10398 Mayat $64 may 3 Bl. 47 or cost of goods sold Hay 4 $2900 May 29 $50 May 22 43900 or Rerained Earnings cr Hay Bal- $2300 May 31 $250 May 31 Bal $ 2500 Hoy 31. Bat. 86400 Requirement o First choice Ltd Income Statement (partial) Month Ended May 1, 2017 Amount particolars Sales $ 10300 Less: allowances sales Sales returns y discounts $ 100 664 $ (164) Net sales $ 10136 $ (6400) cost of goods Gross profit sold → $3736

(partial) Requirement ①: First choice Ltd Statement of financial position May 31, 2018 Assets : Corrent assets Cash $ 11846 Accounts Receivable 300 Inventory 3900 supplies Toral current assets $ 16546 to off Soo