Question

Question 3 of 3 < / 1 Ili 2 Current Attempt in Progress Molly's Greenhouse supplies bedding plants and other gardening products to a variety of stores across Alberta and also has a local greenhouse open to the public. Molly's uses a perpetual inventory system and the earnings approach for revenue recognition. Transactions for the business are shown below: May Purchased 500 decorative hanging baskets from Planters R Us, on account, at a cost of $30 each, terms 2/10, 1/30. FOB shipping point The correct company paid cash for the $200 shipping charges. Sold 250 hanging baskets to a hardware store in the city, on account, for a total invoice price of $12.500. Terms are 1/10, n/30 and the cost was $30 per basket. Molly's paid the shipping charge of $75 on the same day, Received a credit from Planters R Us for the return of 40 hanging baskets that had defective hangers. 20 of the baskets from the sale of May 4 were returned to the greenhouse for a full refund because the customer did not have enough room to store them. Made a payment on account for the balance owing to Planters R Us for the purchase of May 2. Received a cheque for the appropriate amount from the hardware store for the sale of May 4 3 4 5 7 12 13 Post to the Merchandise Inventory and Cost of Goods Sold accounts and calculate the ending balances. Assume beginning inventory is $1.300,(Post entries in the order displayed in the problem statement.)

Answer 1

Merchandise Inventory
Beginning	1,300	May 4	7,500
May 2	15,000	May 5	1,200
May 3	200	May 12	276
May 7	600
Ending	8,124
Cost of Goods Sold
Beginning	0
May 2	7,500	May 7	600
Ending	6,900