Question

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.

Answer 1

Answer:

Explanation:

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