Question

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

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