Question

John’s Specialty Store uses a periodic inventory system. The following are some inventory transactions for the...

John’s Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May:

  1. John's purchased merchandise on account for $5,900. Freight charges of $750 were paid in cash.
  2. John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $1,050 and John’s account was credited by the supplier.
  3. Merchandise costing $3,250 was sold for $6,100 in cash.


Required:
Prepare the necessary journal entries to record these transactions.

Homework Answers

Answer #1

--Required journal entries under PERIODIC system

Accounts title Debit Credit
Purchases $5,900
   Accounts payable $5,900
(to record purchases)
Freight In $750
   Cash $750
(to record payment of freight)
Accounts Payable $1,050
   Purchase Return & Allowances $1,050
(to record goods returned)
Cash $6,100
   Sales Revenue $6,100
(to record sales)
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