Question

On June 5, Staley Electronics purchases 100 units of inventory on account for $10 each. After closer examination, Staley determines 20 units are defective and returns them to its supplier for full credit on June 9. All remaining inventory is sold on account on June 16 for $15 each.Required:Record transactions for the purchase, return, and sale of inventory.

Answer 1

Answer:

See the journal entries below.

Explanation:

First, we have:

Units of inventory purchased = 100

Units of inventory returned = 20

Units of inventory sold = Units of inventory purchased - Units of inventory returned = 100 - 20 = 80

Therefore, the journal entries will be as follows:

Date         Details                                             Debit ($)               Credit ($)  

June 5      Inventory (100 * $10)                         1,000

                 Accounts payable                                                         1,000

                (To inventory purchased on account.)                                          

June 9      Accounts payable (20 * $10 )            200

                 Inventory                                                                         200

                (To record inventory return.)                                                        

June 16    Account receivable (80 * $15)         1,200

                Sales                                                                               1200

                (To record sales on account.)                                                      

                Cost of goods sold (80 * $10)           800  

                Inventory                                                                         800

                (To record cost of goods sold on account)