Question

Mark's Music is a store that buys and sells musical instruments and uses a periodic inventory system. Transactions for the business are shown below: Nov.2 Purchased two electric guitars from Fender Supply Limited, on account, at a cost of $950 each, terms 1/10,n/60. 4 Made a cash sale of two keyboards for a total invoice price of $2,700. The cost of each keyboard was $950. 5 Received a credit from Western Acoustic Inc. for the return of an acoustic guitar which was defective. The original invoice price was $475 and the guitar had been purchased on account. 7 One of the keyboards from the cash sale of Nov. 4 was returned to the store for a full cash refund because the customer was not satisfied with the instrument. 8 Purchased store supplies from a stationery store. The price of the supplies is $200. 10 Sold one Omega trumpet to the Toronto Regional Band, on account, for an invoice price of $3,100. Terms are 1/10, n/60. The trumpet had cost Mark's Music $1,420. 12 Made a payment on account for the amount owing to Fender Supply Limited for the purchase of Nov. 2. 13 Purchased two saxophones from Yamaha Canada Inc. on account. The invoice price was $2,200 for each saxophone. Terms are 1/10, n/30. 16 Returned to Yamaha Canada Inc. one of the saxophones purchased on Nov. 13, as it was the wrong model. Received a credit from Yamaha for the full purchase price. 20 Received a cheque for the appropriate amount from the Toronto Regional Band for the purchase of Nov. 10 22 Paid balance owing to Yamaha Canada Inc. Prepare the journal entries to record the Mark's Music transactions assuming the company uses the earnings approach to recognize revenue. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.)

Answer 1

Journal entries for Periodic Inventory system:
Date	Accounts title and explanations	Debit $	Credit $
2-Nov	Purchases	$     1,900.00
	Accounts Payable -Fender Supply		$      1,900.00
4-Nov	Cash	$     2,700.00
	Sales revenue		$      2,700.00
5-Nov	Cash	$        475.00
	Accounts payable-Westrn Acoustic		$         475.00
7-Nov	Sales Return	$        950.00
	Cash		$         950.00
8-Nov	Store Supplies	$        200.00
	Accounts Payable		$         200.00
10-Nov	Accounts Receivable	$     3,100.00
	Sales Revenue		$      3,100.00
12-Nov	Accounts Payable -Fender Supply	$     1,900.00
	Cash		$      1,881.00
	Sales Discount		$           19.00
13-Nov	Purchases	$     4,400.00
	Accounts Payable - Yamaha Canada		$      4,400.00
16-Nov	Accounts Payable	$     2,200.00
	Purchase Returns		$      2,200.00
20-Nov	Cash	$     3,069.00
	Sales discount Dr. (3100*1%)	$          31.00
	Accounts receivable		$      3,100.00
22-Nov	Accounts payable Dr.(4400-2200)	$     2,200.00
	Cash account		$      2,178.00
	Purchase Discount (2200*1%)		$           22.00

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