Question

prepare general journal entries to record the following perpetual system merchandising transactions of Belton Company. use a separate account for each receivable and payable; for example, record the sale on June 1 in Accounts Receivable - Avery & Wiest.

June 1 sold merchandise to Avery & Weist for $9500; terms 2/5, n/15. FOB destination (cost of sales $6,650).

2 purchased $ 4900 of merchandise from Angolac Suppliers; terms 1/10, n/20, FOB shipping point.

4 purchased merchandise inventory from Bastille Sales for $11,400; terms 1/15, n/45, FOB Bastille Sales.

5 sold merchandise to Gelgar for $ 11,000; terms 2/5, n/15, FOB destination (cost of sales $7700)

6 Collected the amount owing from Avery & Weist regarding the June 1 sale.

12 paid Angolac Suppliers for the June 2 purchase.

20 Collected the amount owing from Gelgar regarding the June 5 sale.

30 Paid Bastille Sales for the June 4 purchase.

Part 2

Based on the information provided above, calculate (a) net sales, (cost of goods sold), and (c) gross profit for the month ended June 30, 2020.

Answer 1

1)

Journal entries under perpetual inventory system

Date	Accounts title	Debit($)	Credit($)
June 1	Accounts receivable - Avery & Wiest	9,500
	Cost of goods sold	6,650
	Sales revenue		9,500
	Inventory		6,650
	[Goods sold on account at a profit ]
June 2	Inventory	4,900
	Accounts payable - Angolac Suppliers		4,900
	[Goods purchased on account ]
June 4	Inventory	11,400
	Bastille Sales		11,400
	[Goods purchased on account ]
June 5	Accounts receivable - Gelgar	11,000
	Cost of goods sold	7,700
	Sales revenue		11,000
	Inventory		7,700
	[Goods sold on account at a profit ]
June 6	Cash	9,310
	Sales Discount	190
	Accounts receivable - Avery & Wiest		9,500
	[Cash collected from customer ]
June 12	Accounts payable - Angolac Suppliers	4,900
	Cash		4,851
	Inventory [ 4,900 X1%]		49
	[Payment made to supplier and received discount ]
June 20	Cash	11,000
	Accounts receivable - Gelgar		11,000
	[ Collection received from customer ]
June 30	Accounts payable - Bastille sales	11,400
	Cash		11,400
	[Payment made to supplier ]

2) Net sales = Gross Sales revenue - Sales discount

Net sales = [ $ 9,500 + $ 11,000 ] - $ 190

Net sales = $ 20,310

Cost of goods sold = $ 6,650 + $ 7,700 = $ 14,350

Gross profit = Net sales - Cost of goods sold

Gross profit = $ 20,310 - $ 14,350 = $ 5,960