Question

• Gadget Palace is a retailer selling unique hardware. Gadget Palace uses a perpetual inventory system. Journalize the following transactions: Chart of Accounts: Cash, Accounts Receivable, Inventory. Sales, COGS, Delivery Expense (24 points)

	On July 5, Gadget Palace sells inventory to Turbo Tools for $11,400.00 with terms 2/10, n/30. Cost of Inventory was $9,500.00
	On July 6, Gadget Palace pays Fast Truck Transport $75.00 for freight in on the July 5 order.
	On July 8, Gadget Palace issues a debit memo to Turbo Tools for $250.00 for damaged merchandise. Cost of Inventory was $175.00.
	On July 15, Gadget Palace receives a payment from Turbo Tools for the balance due.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
July 5	Accounts receivable , Turbo Tools	$ 11,400
	Sales revenue		$ 11,400
	[To record sale of inventory]
July 5	Cost of goods sold	$ 9,500
	Inventory		$ 9,500
	[To record cost of inventory sold]
July 6	Inventory	$ 75
	Cash		$ 75
	[To record pyament of freight]
July 8	Sales returns and allowance	$ 250
	Accounts receivable		$ 250
	[To record issuance of debit memo]
July 8	Inventory	$ 175
	Cost of goods sold		$ 175
	[To record returns of cost of goods sold]
July 15	Cash	$ 10,927
	Sales discount	223
	Accounts receivable		$ 11,150
	[To record received payment from Turbo Tools]