Question

A company has the following transactions during March: March 3 Purchases inventory on account for $3,100,...

A company has the following transactions during March: March 3 Purchases inventory on account for $3,100, terms 2/10, n/30. March 5 Pays freight costs of $250 on inventory purchased on March 3. March 6 Returns inventory with a cost of $700. March 12 Pays the full amount due on March 3 purchase. March 29 Sells all inventory purchased on March 3 (less those returned on March 6) for $5,700 on account. Record all transactions, including the month-end adjustment to cost of goods sold, assuming the company uses a periodic inventory system and has no beginning inventory

  • Record month-end adjustment.

Note: Enter debits before credits.

Date General Journal Debit Credit
March 31 Cost of Goods Sold 2,102
Purchases 2,102

Homework Answers

Answer #1

Solution

Date Accounting titles Debit Credit
March 3 inventory. Dr $3100
To Account payable $3100
( To record the inventory purchased on Account.)
March 5

inventory. Dr

$250
To cash $250
( To record the freight charges paid)
March 6 Accounts payable. Dr $700
To inventory $700
( To record the inventory return)
March 12

Account payable. Dr( note)

$2400
To cash. ( Note) $2352
To inventory( note) $48
( To record the amount paid for the purchases on March 3)
March 29 Account receivable. Dr $5700
To inventory $5700
( To record the sale of inventory)
March 29

cost of goods sold. Dr

($3100+$250-$700-$48)

$2602
To inventory $2602
( To record the value of sold inventory value to cost of goods sold Account)

Note)

Account payable = $3100-$700 = $2400

Inventory =$ 2400*2%= $48

Cash = $2400-$48= $2352

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