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10 June, 21:56

Gamegirl Inc., has the following transactions during August.

August 6 Sold 64 handheld game devices for $170 each to DS Unlimited on account, terms 1/10, net 60. The cost of the 64 game devices sold, was $150 each.

August 10 DS Unlimited returned four game devices purchased on 6th August since they were defective.

August 14 Received full amount due from DS Unlimited.

Required:

1. Prepare the transactions for GameGirl, Inc., assuming the company uses a perpetual inventory system.

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Answers (1)
  1. 11 June, 01:16
    0
    1. August 6.

    Account Receivable-Ds Unlimited (64*170) Dr.$10,880

    Sales Revenue Cr.$10,880

    Cost of Goods Sold ($150*64) Dr.$9,600

    Inventory Cr.$9,600

    2. August 10.

    Inventory/Sales Revenue (4*170) Dr.$680

    Account Receivable-Ds Unlimited Cr.$680

    3. August 14.

    Cash (10,880-680) * 99% Dr.$10,098

    Cash Discount Dr.$ 102

    Accounts Receivable Cr.$ 10,200

    Note:

    The gross method of discount is used which means at time of receipt, discount impact is taken. In this question 1/10 means 1% discount allowed if payment made within 10 days of sale. This means DS unlimited qualifies for cash discount as payment is received on 14 August
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Home » Business » Gamegirl Inc., has the following transactions during August. August 6 Sold 64 handheld game devices for $170 each to DS Unlimited on account, terms 1/10, net 60. The cost of the 64 game devices sold, was $150 each.
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