Question

1. 6.3 Review the following transactions for Birdy Birdhouses and record any required journal entries.

Sep. 6 Birdy Birdhouses purchases 55 birdhouses at $40 each with cash.

Sep. 8 Birdy Birdhouses purchases 80 birdhouses at $45 each on credit. Terms of the purchase are 2/10, n/30, invoice date September 8.

Sep. 10 Birdy discovers 10 of the birdhouses are damaged from the Sept 6 purchase and returns them to the supplier for a full refund. Birdy also discovers that 10 of the birdhouses from the Sept 8 purchase are painted the wrong color but keeps them since the supplier granted an allowance of $20 per birdhouse.

Sep. 18 Birdy pays their account in full from the September 8 purchase, less any returns, allowances, and/or discounts.

Answer 1

	Periodic Inventory System:
Date	Account Titles	Debit $	Credit $
Sep.6	Purchases	2,200
	Cash		2,200
	(55 x 40 )
Sep.8	Purchases	3,600
	Accounts Payable		3,600
	(80 x 45 )
Sep.10	Cash	400
	Purchase return & allowances		400
	(10 x 40 )
Sep.10	Accounts Payable	200
	Purchase return & allowances		200
	(10 x 20 )
Sep.18	Accounts Payable ( 3,600 - 200 )	3,400
	Purchase discount		68
	Cash		3,332

	Perpetual Inventory System
Date	Account Titles	Debit $	Credit $
Sep.6	Inventory	2,200
	Cash		2,200
	(55 x 40 )
Sep.8	Inventory	3,600
	Accounts Payable		3,600
	(80 x 45 )
Sep.10	Cash	400
	Inventory		400
	(10 x 40 )
Sep.10	Accounts Payable	200
	Inventory		200
	(10 x 20 )
Sep.18	Accounts Payable ( 3,600 - 200 )	3,400
	Inventory		68
	Cash		3,332