Answer:
June (1)
Debit Inventory $8,701
Credit Cash/Accounts Payable $8,701
Being entries to record inventory purchased
June (2)
Debit Accounts Payable $1,078
Credit Inventory $1,078
Being entries to record return of inventory on accounts
June (3)
For sales, the entries required are
Debit Cash/Accounts receivable $31,753
Credit Sales revenue $31,753
For the inventory aspect,
Debit Cost of sales $21,637
Credit Inventory $21,637
Explanation:
When a company purchases inventory, the entries required are debit Inventory and Credit Cash/Accounts Payable. When inventory is returned, the reverse entries earlier posted are posted to account for the return.
When Sales are made,there are two sides to it, one with reference to sale, the other with reference to Inventory.
For sales, the entries required are
Debit Cash/Accounts receivable
Credit Sales revenue
For the inventory aspect,
Debit Cost of sales
Credit Inventory
During June, (1)
Amount of inventory purchased
= 113 × $77
= $8,701
During June, (2)
Amount returned on credit
= 14 × $77
= $1,078
During June, (3)
Revenue earned = 281 × $113
= $31,753
Cost of goods sold = 281 × $77
= $21,637
