Question

The qestion is to prepare the journal entry using a perpetual inventory

Prepare journals entries for the following, assuming the company uses a perpetual inventory method and records purchases at their net amounts. Note: You can use T-accounts which help you to find the answers (from the balance of each account). Use gross amount approach.

June 1	Purchased merchandise from Harper Company for $1,000 with terms of 2/10, n/30
June 2	Returned $100 of the merchandise to the Harper Company.
June 6	Paid the amount owed to the Harper Company taking advantage of discount by cash. Use Purchases Discount Taken. Remember it is after the return of $100 merchandise.
June 12	Sold all of the merchandise on hand from the Harper Company for $1,200 cash. Two separate entries: one for sale and another for cost of good sold

Account	Debit	Credit

Answer 1

date	Accounts Title	Dr	Cr
1-Jun	Mercandise Inventory	$1,000
	Accounts Payable		$1,000
	(being mercandise purchased on account)
2-Jun	Accounts Payable	$100
	Mercandise Inventory		$100
	(being mercandise returned)
6-Jun	Accounts Payable	900
	Mercandise Inventory (900*2%)		18
	Cash		882
	(being payment made within the discount period)
12-Jun	Cash	$1,200
	Sales		$1,200
	(being sales made for cash)
	Cost of good sold	$882
	Mercandise Inventory		$882
	If any doubt please comment