Answer:
Circuit Country
a. Journal Entries:
June 2: Debit Inventory $1,750
Credit Accounts payable (Radio World) $1,750
To record the purchase of goods, terms 2/15, n/45.
June 4: Debit Freight-in $210
Credit Cash $210
To record the payment for freight.
June 8: Debit Accounts payable (Radio World) $200
Credit Inventory $200
To record the return of goods.
June 10: Debit Accounts payable (Radio World) $1,550
Credit Cash $1,519
Credit Cash Discounts $31
To record payment on account, including discounts.
June 11: Debit Accounts receivable $3,100
Credit Sales Revenue $3,100
To record the sale of goods on account.
June 11: Debit Cost of goods sold $2,250
Credit Inventory $2,250
To record the cost of goods sold.
June 18: Debit Cash $2,100
Credit Accounts receivable $2,100
To record cash received on account.
June 20: Debit Inventory $2,850
Credit Accounts payable (Sound Unlimited) $2,850
To record the purchase of goods on credit, terms 2/10, n/30.
June 23: Debit Cash $4,350
Credit Sales Revenue $4,350
To record the sale of goods for cash.
June 23: Debit Cost of goods sold $2,650
Credit Inventory $2,650
To record the cost of goods sold.
June 26: Debit Accounts payable(Sound Unlimited) $500
Credit Inventory $500
To record the return of goods.
June 28: Debit Accounts payable(Sound Unlimited) $2,350
Credit Cash $2,303
Credit Cash Discounts $47
To record payment on account, including discounts.
b. Income Statement for the month ended June 30:
Sales Revenue $7,450
Cost of goods sold 5,032
Gross profit $2,418
Explanation:
a) Data and Analysis:
June 1: Beginning inventory $2,050
June 2: Inventory $1,750 Accounts payable (Radio World) $1,750, terms 2/15, n/45.
June 4: Freight-in $210 Cash $210
June 8: Accounts payable (Radio World) $200 Inventory $200
June 10: Accounts payable (Radio World) $1,550 Cash $1,519 Cash Discounts $31
June 11: Accounts receivable $3,100 Sales Revenue $3,100
June 11: Cost of goods sold $2,250 Inventory $2,250
June 18: Cash $2,100 Accounts receivable $2,100
June 20: Inventory $2,850 Accounts payable (Sound Unlimited) $2,850 terms 2/10, n/30.
June 23: Cash $4,350 Sales Revenue $4,350
June 23: Cost of goods sold $2,650 Inventory $2,650
June 26: Accounts payable(Sound Unlimited) $500 Inventory $500
June 28: Accounts payable(Sound Unlimited) $2,350 Cash $2,303 Cash Discounts $47
Cash
Date Account Titles Debit Credit
June 4: Freight-in $210
June 10: Accounts payable (Radio World) 1,519
June 18: Accounts receivable $2,100
June 23: Sales Revenue 4,350
June 28: Accounts payable(Sound Unlimited) 2,303
Accounts Receivable
Date Account Titles Debit Credit
June 11: Sales Revenue $3,100
June 18: Cash $2,100
Inventory
Date Account Titles Debit Credit
June 1 Beginning balance $2,050
June 2 Accounts payable
(Radio World) 1,750
June 8: Accounts payable (Radio World) $200
June 11: Cost of goods sold 2,250
June 20: Accounts payable
(Sound Unlimited) 2,850
June 23: Cost of goods sold 2,650
June 26: Accounts payable
(Sound Unlimited) 500
Accounts Payable
Date Account Titles Debit Credit
June 2: Inventory $1,750
June 8: Inventory $200
June 10: Cash 1,519
Cash Discounts 31
June 20: Inventory 2,850
June 26: Inventory 500
June 28: Cash 2,303
Cash Discounts 47
Sales
Date Account Titles Debit Credit
June 11: Accounts receivable $3,100
June 23: Cash 4,350
June 30: Income Summary $7,450
Cost of Goods Sold
Date Account Titles Debit Credit
June 4: Freight-in $210
June 10: Cash discounts $31
June 11: Inventory 2,250
June 23: Inventory 2,650
June 28: Cash discounts 47
June 30: Income Summary $5,032
