Question

Novak Company uses a perpetual inventory system. Its beginning inventory consists of 113 units that cost $77 each. During June, (1) the company purchased 338 units at $77 each on account, (2) returned 14 units for credit, and (3) sold 281 units at $113 each. Journalize the June transactions. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) Inventory 26026 Accounts Payable 26026 (2) Accounts Payable 1078 Inventory 1078 (3) Accounts Receivable 24948 Sales Revenue 24948 (To record sales) Cost of Goods Sold 0 Inventory 0 (To record cost of goods sold)

Answer 1

Credit Solution: Preparation of Journal Entries: NO. Account Titles and Explanation Debit 1) Inventory (338 * 77) $ 26,026 Accounts payable (To record purchase) $ 26,026 2 $ 1,078 Accounts payable (14* 77) Inventory (To record purchase returns) $ $ 1,078 3) $ 31,753 Accounts receivable Sales (281 * 113) (To record sales) $ 31,753 $ 21,637 Cost of goods sold (281 *77) Inventory (To record COGS $ 21,637 Kindly Comment down for any clarifications/ queries and please upvote.