Question

Swifty Company uses a perpetual inventory system. Its beginning inventory consists of 58 units that cost $39 each. During June, (1) the company purchased 173 units at $39 each on account, (2) returned 7 units for credit, and (3) sold 144 units at $58 each.

Journalize the June transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(1)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(2)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(3)	enter an account title to record sales	enter a debit amount	enter a credit amount
	enter an account title to record sales	enter a debit amount	enter a credit amount
	(To record sales)
	enter an account title to record cost of goods sold	enter a debit amount	enter a credit amount
	enter an account title to record cost of goods sold

Answer 1

	Swifty Company
	Journal Entries
	( Perpetual Inventory System )
Date	Account Titles and Explanation	Debit	Credit
(1)	Inventory A/c Dr. (173 x $ 39 )	6,747
	To Accounts Payable		6,747
	( To Record Purchase of inventory on account .)
(2)	Accounts Payable A/c ( 7 * $ 39 )	273
	To Inventory A/c		273
	( To Record Purchase Return .)
(3)	Accounts Receivable Dr.( 144 x $ 58 )	8,352
	To Sales Revenue		8,352
	( To Record Sale. )
	Cost of Goods sold A/c Dr. ( 144 x $ 39 )	5,616
	To Inventory		5,616
	( To record cost of goods sold )

sales is assumed to be on credit , that is why accounts receivable is debited .

if sale is assumed to be on cash , cash account will be debited instead of accounts receivable.

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