Question

Problem I: (16.5 pts) Carter Inc. uses the perpetual inventory system and the gross method for recording both purchase and sales discounts. All purchases and sales of inventory are on account with terms 2/15, n/30. Carter Inc. had the following select transactions occur during May and June of 2020: May 1 --- Purchased inventory costing $12,000, terms 2/15, n/30. May 1 --- Paid $200 cash to UPS for freight related to the above purchase. Carter is responsible for these freight charges. Freight charges are not eligible for the discount. May 8- Returned inventory costing $1,000 back to the supplier. The return occurred before the supplier was paid for the original invoice amount. May 9-- Paid the above supplier for the remaining amount still owed. (Note: There was no beginning balance in the subsidiary ledger account for the supplier) June 10- Sold inventory having a sales price of $7,000 and a cost of $3,000, terms 2/15, n/30. June 25 - The above customer paid Carter the balance they owe. June 30- The customer from the sale on June 10 returned one-half of the inventory they had bought. The customer was given a cash refund. Assume Carter does not estimate its sales returns and allowances. Required: Using proper formatting for your journal entries, record Carter Inc.'s transactions in chronological order in the general journal that appears on the next page. Explanations are not needed.

Answer 1

The answer provided in the below image

Pt Journal Purchase Al Do May 1, 2020 $12,000 $12,00 To See All Supplier May 1, 212 $200 Freight charges Alla To UPS ALL $ 200 UPS Al on $ 200 To Cash $200 May 8, 20. Supplier Alo Pro $ 13 To Purchase return Al $1000 May 9,7) Supplier Al On $11,000 To Discount received Ak 220 To Bent Ale 1,780 Jone -1,020. Customer Al Do $7,000 Te Sales Ah $7,03) June 1son. Bank Alo Do 6,860 Distand Alon 140. To Custo non pį 17,22 Jue -30. Sdes Al On 3, Soo to soles retorn. 43, Soo