John's Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May 2013:

1. John's purchased merchandise on account for $5,400. Freight charges of $500 were paid in cash.

2. John? s returned some of the merchandise purchased in (1). The cost of the merchandise was $800 and John? s account was credited by the supplier.

3. Merchandise costing $3,000 was sold for $5,600 in cash

Prepare the necessary journal entries to record these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Record the purchased merchandise on account for $5,400

Record the payment of freight charges for $500.

Record the purchase return for $800.

Record the merchandise sold for $5,600.

Record the entry of cost of goods sold.

Question

Business

Karly Galvan

24 March, 08:05

John's Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May 2013:

1. John's purchased merchandise on account for $5,400. Freight charges of $500 were paid in cash.

2. John? s returned some of the merchandise purchased in (1). The cost of the merchandise was $800 and John? s account was credited by the supplier.

3. Merchandise costing $3,000 was sold for $5,600 in cash

Prepare the necessary journal entries to record these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Record the purchased merchandise on account for $5,400

Record the payment of freight charges for $500.

Record the purchase return for $800.

Record the merchandise sold for $5,600.

Record the entry of cost of goods sold.

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Answers (1)

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Nico Mata · Answer 1

The journal entries are shown below:

1. Purchase A/c Dr $5,400

To Accounts Payable $5,400

(Being merchandise is purchased on credit)

2. Freight-In A/c Dr $500

To Cash A/c $500

(Being freight charges are paid in cash)

3. Accounts Payable A/c Dr $800

To Purchase Returns A/c $800

(Being return merchandise is recorded)

4. Cash A/c Dr $5600

To Sales revenue A/c $5600

(Being merchandise is sold for cash)

5. No journal entry required