Question

DS Unlimited has the following transactions during August.

Answer 1

Solution:

Inventory                  21,320 debit

        A/P                                            21,320 credit

--to record purchase from Game Girl --

Inventory                   360 debit

       Cash                                           360 credit

--to record the freight-in--

A/P                            1,560 debit

    Inventory                                     1,560 credit

--to record returned goods to GameGirl--

A/P                          19,760 debit

      Inventory                                       395 credit

      Cash                                           19,365 credit

--to record payment to GameGirl--

accounts receivables       17,360 debit

             sales revenues                         17,360 credit

COGS                               8,406 debit

                                                              8,406 credit

--to record sale and subsequent cost of the sale--

total amount of the purchase in dollars:

82 game devices x 260 dollars each = 21,320

six returned devices:

6 x 260 = 1,560

invoice balance: 21,320 - 1,560 = 19,760

discount because payment within the first ten days:

19,760 x 2% = 395

final value: 19,760 - 395 = 19,365

sale of 62 devices at 280 = 17,360