promotion image of download ymail app
Promoted

Accounting help. Journalize transactions using perpetual system.?

Hawkeye Electric Company engaged in the following transactions during July. Journalize the preceding transactions on the books of Hawkeye Electric Company using the perpetual system of inventory.

July 2 – Purchased inventory for cash, $800

July 8 – Purchased inventory of $3,000, plus freight charges of $230. Credit terms are 3/15 n/30.

July 9 – Sold goods costing $700 for cash, $1,200.

July 11 – Returned $200 of the inventory purchased on July 8.

July 12 – Purchased inventory on credit, $3,330. Terms are 3/10, n/30.

July 14 – Sold inventory on credit, $9,600. The cost of inventory is $5,000 and terms are 2/10 n/30.

July 20 – Received returned inventory from July 14 sale, $400. Hawkeye’s cost of the inventory received was $250.

July 21 – Paid the supplier for goods purchased on July 8 less the return on July 11 and the discount.

July 24 - Received payment from the sale of July 14 less the discount.

July 28 – Paid the amount due on the purchase of July 12.

1 Answer

Relevance
  • Sandy
    Lv 7
    6 years ago
    Favorite Answer

    using the perpetual system of inventory

    July 2 – Purchased inventory for cash, $800

    Dr Merchandise Inventory (MI) $800

    Cr Cash $800

    July 8 – Purchased inventory of $3,000, plus freight charges of $230. Credit terms are 3/15 n/30.

    Dr MI $3,230

    Cr Accounts payable (AP) $3,230

    July 9 – Sold goods costing $700 for cash, $1,200.

    Dr Cash $1,200

    Cr Sales $1,200

    Dr COGS $700

    Cr MI $700

    July 11 – Returned $200 of the inventory purchased on July 8.

    Dr AP $200

    Cr MI $200

    July 12 – Purchased inventory on credit, $3,330. Terms are 3/10, n/30.

    Dr MI $3,330

    Cr AP $3,330

    July 14 – Sold inventory on credit, $9,600. The cost of inventory is $5,000 and terms are 2/10 n/30.

    Dr Accounts receivable (AR) $9,600

    Cr Sales $9,600

    Dr COGS $5,000

    Cr MI $5,000

    July 20 – Received returned inventory from July 14 sale, $400. Hawkeye’s cost of the inventory received was $250.

    Dr Sales returns and allowances $400

    Cr AR $400

    Dr MI $250

    Cr COGS $250

    July 21 – Paid the supplier for goods purchased on July 8 less the return on July 11 and the discount.

    Dr AP $3,030 [($3,000 - $200) + $230]

    Cr Cash $2,946

    Cr MI $84 ($2,800 x 3%)

    Discount is never applied to freight charges

    July 24 - Received payment from the sale of July 14 less the discount.

    Dr Cash $9,016

    Dr Sales discount $184 ($9,200 x 2%)

    Cr AR $9,200 ($9,600 - $400)

    July 28 – Paid the amount due on the purchase of July 12.

    Dr AP $3,330

    Cr Cash $3,330

    July 28 is past the 10 day discount period, so no discount is given.

    • Commenter avatarLogin to reply the answers
Still have questions? Get your answers by asking now.