Question

A company had the following transactions during December:

12/1 Sold computers for $5,000, terms 4/10, n/30. The items sold had a cost of $3,500.

12/2 Purchased wireless routers for cash, $720.

12/4 Purchased printers for $2,600, terms 1/20, n/30.

12/5 The customer returned half of the computers purchased.

12/10 Paid cash for freight charges of $200 for printers purchased on 12/4.

12/10 Received payment for computers sold 12/1.

12/11 Returned faulty printers purchased on 12/4 for $600.

12/17 Paid for the printers purchased 12/4.

12/18 Sold all wireless routers purchased for $1,000 cash.

12/19 Sold all of the printers for $2,800, terms 2/10, n/30.

12/30 Received cash for the printers sold.

----Prepare the journal entries to record these transactions using a perpetual inventory system.

Answer 1

Journal entries to recird the transactions

12/1 - Customer a/c dr 5000

To computer 3500

To profit on sale 1500

(Being computers sold on profit on credit basis)

12/2 - wireless router a/c dr 720

To cash. 720

(Purchased touter for cash)

12/4- Printer a/c Dr 2600

To supplier 2600

(Purchased printer for credit)

12/5 - Profit on sale a/c Dr 750

   Computer a/c Dr 1750

To customer 2500

(Half of computers sold has been returned .hence half profit also reversed)

12/10 - Freight charges a/c Dr 200

   To cash 200

(Being freight charges paid in cash)

12/10 - Cash a/c Dr 2500

   To customer 2500

(As the payment has been received after 30 days there is no discount hence the pending payment received from customer)

12/11 - Supplier a/c Dr 600

   To printer 600

(Faulty printers returned back)

12/17 - Supplier a/c Dr 2000

   To cash 1980

To discount received 20

(Paid for the printer and discount of 1% received as the payment has been done within 30days)

12/18 - Cash a/c Dr 1000

   To wireless routers 1000

(Wireless routers sold for cash)

12/19 - Customer a/c Dr 2800

   To printer 2800

(Sold all printers to customer on credit)

12/30 - Cash a/c Dr 2800

   To customer 2800

(As the payment has been received after 10days there is no discount and hence full amount received)