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Question 5: Perpetual Inventory: Journal Entries (26 marks) The following are transactions for Chandler Fashions for...

Question 5: Perpetual Inventory: Journal Entries

The following are transactions for Chandler Fashions for the month of June.

June 2              Purchased 3,000 items of inventory under terms 1/10, n/60 and FOB shipping point from Flower Manufacturing. The merchandise had a cost of $12,000

June 7           Returned defective merchandise to Flower Manufacturing with invoice price of $4,000.

June 8          Paid the freight charges on the purchase from Flower Manufacturing in     cash for $200.

June 9              Sold merchandise to Trendy Store on account for $10,000 with terms 2/15, n/60 FOB shipping point.

              Cost of the merchandise sold was $6,000.

June 10          Paid Flower Manufacturing the balance on account.

June 12          Granted sales allowance of $1,000 to Trendy Store for defective merchandise.

June 23          Collected balance owing from Trendy Store.

June 27          Purchased 500 items of inventory, terms 1/15, n/30, FOB destination from Sparkle Co.                The merchandise had a cost $2,000.

June 30          Paid for the merchandise from Sparkle Co.

Instructions

Using a perpetual inventory system, prepare the journal entries to record the transactions

OMIT Explanations.

Date

General Journal

Debit

Credit

June 2

Merchandise Inventory

12000

  Accounts payable- Flower Manufacturing

12000

June 7
Business   Accounting   
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