Question

Record the entries for the following transactions for Shoppers Inc. Shoppers uses a perpetual inventory system and records sales taxes payable at the point of sale. a. On January 1, 2020, Shoppers Inc. purchased merchandise for resale for $63,000 on credit terms 1/15, n/30. Shoppers Inc. incurred a shipping charge of $324 on the purchase, which was immediately paid. Shoppers Inc. uses the gross method to record purchases. b. Shoppers Inc. sells $25,200 of inventory during the first week of January 2020, to customers for $45,000, with a sales tax rate of 5%. Of the total sales for the week, 30% are cash sales, and 70% are credit sales (n/30). c. On January 14, 2020, Shoppers Inc. pays the balance for purchases on account. d. Assume instead that Shoppers Inc. sells $27,000 of inventory during the first week of January 2020 to customers for $50,400, which includes a 5% sales tax. Of the total sales for the week, 30% are cash sales, and 70% are credit sales. Record the sales entry. Note: Round your answers to the nearest whole dollar. Note: List multiple debits or credits (when applicable) in alphabetical order.

Answer 1

	Date	Account Name	Debit $	Credit $
a	Jan1,2020	Merchandise inventory	63324
		Cash		324
		Accounts payable		63000
		To record purchase of inventory
b	Jan7,2020	Account receivables($47250 X 70℅)	33075
		Cash ($47250 X30%)	14175
		Sales		45000
		Sales tax payables(45000 X 5℅)		2250
		To record sale of merchandise
	Jan7,2020	Cost of good sold	25,200
		Merchandise inventory		25,200
		To record cost of sales of merchandise
c	Jan14,2020	Accounts payable	63000
		Cash		62370
		Purchases discount(1℅ of $63000)		630
		To record payment of account
d	Jan7,2020	Accounst receivable(70% X $50400)	35280
		Cash (50400 X 30℅)	15120
		Sales ($50400/105%X100%)		48000
		Sales tax payables ($50400/105% X5℅)		2400
		To record sales of merchandise
	Jan7,2020	Cost of good sold	27000
		Merchandise inventory		27000
		To record cost of sales of merchandise

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