Question

Question 1

At the beginning of June 2017, Pina Colada Distributing Company’s ledger showed Cash $17,000, Merchandise Inventory $4,900, and D. Pina Colada, Capital, $21,900. During the month of June, the company had the following selected transactions:

June 1		Purchased $8,800 of merchandise inventory from Sun Supply Co., terms 1/15, n/30, FOB destination.
2		The correct company paid $220 cash for freight charges on the June 1 purchase.
5		Sold merchandise inventory to Moose Jaw Retailers for $12,000. The cost of the merchandise was $7,700 and the terms were 2/10, n/30, FOB destination.
6		Issued a $800 credit for merchandise returned by Moose Jaw Retailers. The merchandise originally cost $580 and was returned to inventory.
6		The correct company paid $290 freight on the June 5 sale.
7		Purchased $780 of supplies for cash.
10		Purchased $4,750 of merchandise inventory from Fey Wholesalers, terms 2/10, n/30, FOB shipping point.
10		The correct company paid $120 freight costs on the purchase from Fey Wholesalers.
12		Received a $250 credit from Fey Wholesalers for returned merchandise.
14		Paid Sun Supply Co. the amount due.
15		Collected the balance owing from Moose Jaw Retailers.
19		Sold merchandise for $7,500 cash. The cost of this merchandise was $4,500.
20		Paid Fey Wholesalers the balance owing from the June 10 purchase.
25		Made a $530 cash refund to a cash customer for merchandise returned. The returned merchandise had a cost of $325. The merchandise was damaged and could not be resold.
30		Sold merchandise to Bauer & Company for $4,500, terms n/30, FOB shipping point. Pina Colada's cost for this merchandise was $2,600.

(a)

Record the transactions assuming Pina Colada uses a perpetual inventory system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Answer 1

Journal entries:
Date	Accounts title and explanations				Debit $	Cedit $
1-Jun	Merchandise inventory				8800
	Accounts payable					8800
2-Jun	Merchandise inventory				220
	Cash account					220
5-Jun	Accounts receivable				12000
	Sales revenue					12000
	Cost of goods sold				7700
	Merchandise inventory					7700
6-Jun	Sales return and allowance				800
	Accounts receivable					800
	Merchandise inventory				580
	Cost of good s sold					580
6-Jun	Frieght Outwards Expenses				290
	Cash account					290
7-Jun	Accounts payable				780
	Cash account					780
10-Jun	Merchandise inventory				4750
	Accounts payable					4750
10-Jun	Merchandise inventory				120
	Cash account					120
12-Jun	Accounts payable				250
	Merchandise inventory					250
14-Jun	Accounts payable				8800
	Cash account (8800*99%)					8712
	Merchandise inventory (8800*1%)					88
15-Jun	Cash account (11200*98%)				10976
	Sales discount (11200*2%)				224
	Accounts receivable (12000-800)					11200
19-Jun	Cash account				7500
	Sales revenue					7500
	Cost of goods sold				4500
	Merchandise inventory					4500
20-Jun	Accounts payable (4750-250)				4500
	Cash account 4500*98%)					4410
	Merchandise inventory (4500*2%)					90
25-Jun	Sales return and allowance				530
	Cash account					530
	Merchandise inventory				325
	Cost of good s sold					325
30-Jun	Accounts receivable				4500
	Sales revenue					4500
	Cost of goods sold				2600
	Merchandise inventory					2600