Question

The following transactions occurred for Digital Communications Ltd during March 2020.

Required:

For each transaction listed below, record the appropriate general journal/s entries.

Notes:

a) Digital Communications Ltd has adopted the perpetual inventory recording method;

b) If you believe no journal is required, explain the reason;

c) Narrations are not required;

d) Ignore GST.

8 Mar	Inventory that cost $8,000 was purchased paying $6,000 cash and the balance on account.
12 Mar	Credit sales made for $9,000. The inventory had cost $5,000.
22 Mar	Ordered $2,500 of merchandise from a supplier. The supplier will invoice on delivery.
30 Mar	Paid $800 office rent for March.

Answer 1

8 March	Merchandise inventory	8000
	Cash		6000
	Accounts payable		2000
12 March	Account Receivable	9000
	Sale		9000
	Cost of goods sold	5000
	Merchandise Inventory		5000
30 March	Rent Expense	800
	Cash		800

22 march : No journal entry required since its perpetual inventory receipt .Here entry is required when inventory is received.And also there is no invoice to record the purchase. It wiill be recorded when inventory is delivered and invoice is received.

answered by: anonymous