Question

just this one

At the beginning of Year 2, the Redd Company had the following balances in its accounts: Cash Inventory Land Common stock Retained earnings $16,300 6,500 2,500 14,000 11,300 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $11,700 on account from Ross Company under terms 2/10,n/30. The merchandise was delivered FOB shipping point. Freight costs of $850 were paid in cash. 2. Returned $700 of the inventory it had purchased from Ross Company because the inventory was damaged in transit. The seller agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Ross Company within the cash discount period. 4. Sold inventory that had cost $9,000 for $15,000 on account, under terms 2/10. n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $1.450 and was sold to the customer for $2,600 cash. The customer was paid $2,600 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $740 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $4,500. 9. Recognized accrued interest income of $500. 10. Took a physical count indicating that $7.000 of inventory was on hand at the end of the accounting period. (Hint: Determine the current balance in the inventory account before calculating the amount of the inventory write down.)

Answer 1

Event	General Journal	Debit($)	Credit($)
10	Cost of Goods Sold (inventroy loss)	3,580
	Merchandise Inventory		3,580
	(to record entry for inventory loss)

Workings:

Begining Inventory	$6,500
Add;Purchase	$11,700
Freight Cost	$850
Less:Purchase return	($700)
Discount Portion [($11,700-700) * 2%]	($220)
Cost of goods sold (SALES)	($9,000)
Add; Sales Return	$1,450
	$10,580
Inventory Loss [ 10,580 - 7,000]	$3,580
Ending Inventory	$7,000