Question

Keiler Motorcycle Shop completed the following transactions during the month of October. Keiler uses a perpetual inventory system. Any freight paid was paid with cash.

Oct.    3   Purchased 20 bikes at a cost of $1,150 each from the Lyons Bike Company, under credit terms 2/10, N/45. FOB shipping point.

          4   The correct company paid $150 cash freight for above shipment

          6   Sold 10 bikes to Doug’s Bicycle for $1,500 each, terms n/30. Terms FOB destination.

          7   Received credit from the Lyons Bike Company for the return of 2 defective bikes.

        13   Issued a credit to Doug’s Bicycle for the return of one bike from Oct 6 sale.

        25   Doug’s Bicycle paid their account in full

        27   Paid Lyons Bike Company.

Required: Journalize the above transactions.

Answer 1

Oct. 3	Inventory ( 20 * 1150 )	23000
	Accounts payable		23000
Oct. 4	Inventory	150
	Cash		150
Oct. 6	Accounts receivable	15000
	Sales revenue ( 10 * 1500 )		15000
	COGS	11500
	Inventory ( 10 * 1150 )		11500
Oct. 7	Accounts payable	2300
	Inventory ( 2 * 1150 )		2300
Oct. 13	Sales return ( 1 * 1500 )	1500
	Accounts receivable		1500
	Inventory ( 1 * 1150 )	1150
	COGS		1150
Oct. 25	Cash	13500
	Accounts receivable		13500
Oct. 27	Accounts payable	20700
	Cash		20700