Question

QUESTION 1:

Teacup Co engaged in the following transactions in September 2019:

Sep.1: Sold merchandise on credit to Melly Co, $3,000 (cost, $1,800).

Sep.2:    Purchased merchandise on credit from Lever Co, $6,000.

Sep.3:    Paid Lever Co for shipping charges on merchandise on September 2, $300.

Sep. 5:    Purchased merchandise on credit from Rudd Co, $9,600, including $600 freight cost paid by Rudd.

Sep.7:    Purchased office supplies on credit, $256.

Sep. 8: Sold merchandise on credit to Depp Co., $2,400 (cost, $1,440).

Sep. 10: Returned damaged merchandise received from Lever Co. On September 2 for credit, $600.

Sep. 11: Returned damaged office supplies received on September 7, $156.

Sep. 15: Received check from Melly Co for the purchased of September 1.

Sep. 17: Sold merchandise for cash, $1,800 (cost, $960).

Sep. 20: Accepted from Depp. Co. a return of merchandise, which was put back in inventory, $200 (cost, $120).

1. Prepare journal entries to record the transactions, assuming use of the perpetual inventory system.
2. Prepare journal entries to record the transactions, assuming use of the periodic inventory system.

Answer 1

Periodic Inventory Accounts Title Sep-01 Accounts Receivable $3,000 Perpetual Inventory Accounts Title Sep-01 Accounts Receivable Sales Cost of Goods Sold Merchandise Inventory Sep-02 Merchandise Inventory $ Accounts Payable Sep-03 Merchandise Inventory $ Date Date Debit Credit Debit Credit 3,000 $ Sales 3,000 3,000 Sep-02 Purchases Accounts payable Sep-03 Freight Charges Cash Sep-05 Purchases Freight Charges Accounts payable Sep-07 Supplies Accounts Payable Sep-08 Accounts Receivable $2,400 $6,000 1,800 1,800 6,000 300 6,000 6,000 300 $9,600 300 Cash 300 $600 Sep-05 Merchandise Inventory $ Accounts Payable Sep-07 Supplies Accounts Payable Sep-08 Accounts Receivable Sales Cost of Goods Sold Merchandise Inventory Sep-10 Accounts Payable Merchandise Inventory Sep-11 Accounts Payable Supplies Sep-15 Cash $10,200 10,200 $ 10,200 256 256 256 256 Sales Sep-10 Accounts Payable Purchase returns $ 2,400 2,400 600 2,400 600 1,440 Sep-11 Accounts Payable Supplies Sep-15 Cash Accounts Receivable Sep-17 Accounts Receivable $1,800 156 1,440 156 $ 600 $ $ $3,000 600 $ 156 3,000 156 Sales Sep-20 Sales Returns $ 1,800 3,000 Accounts Receivable Sep-17 Accounts Receivable Sales $ 200 3,000 Accounts Receivable $ 1,800 200 $ 1,800 Cost of Goods Sold $ 960 Merchandise Inventory Sep-20 Sales Returns Accounts Receivable Merchandise Inventory$ 960 200 $ 200 120 Cost of Goods Sold 120