Question

The Jewel Box purchases jewellery from around the world and sells to local retailers in Canada. Consider the following perpetual system merchandising transactions of The Jewel Box. Use a separate account for each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Luu Company.

Aug. 1 Purchased necklaces from Luu Company for $3,600 under credit terms of 2/10, n/30, FOB destination.
       4 At Luu Company’s request, paid $310 for freight charges on the August 1 purchase, reducing the amount owed to Luu.
        5 Sold rings to Green Ruby for $3,560 under credit terms of 3/10, n/60, FOB destination. The merchandise had cost $2,270.
        8 Purchased bracelets from Jane Co. for $4,800 under credit terms of 2/10, n/45, FOB shipping point.
        9 Paid $285 shipping charges related to the August 5 sale to Green Ruby.
      10 Green Ruby returned the rings purchased from the August 5 sale that had cost $400 and been sold for $760. The merchandise was restored to inventory.
      12 After negotiations with Jane Co. concerning problems with the merchandise purchased on August 8, received a credit memo from Jane granting a price reduction of $500.
      15 Received balance due from Green Ruby for the August 5 sale.
      17 Purchased office equipment from WestCo on credit, $5,600, n/45.
      18 Paid the amount due Jane Co. for the August 8 purchase.
      19 Sold earrings to Chic Jewellery for $2,500 under credit terms of 2/10, n/30, FOB shipping point. The merchandise had cost $1,130.
      22 Chic Jewellery requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Sent Chic Jewellery a credit memo for $200 to resolve the issue.
      29 Received Chic Jewellery’s payment of the amount due from the August 19 purchase.
      30 Paid Luu Company the amount due from the August 1 purchase.

Prepare General Journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Journal Entries
date	explanation	debit	credit
1-Aug	Inventory	3600
	accounts payable-Luu company		3600
4-Aug	accounts payable-Luu company	310
	cash		310
5-Aug	accounts receivables-green ruby	3560
	sales revenue		3560
5-Aug	cost of goods sold	2270
	inventory		2270
8-Aug	Inventory	4800
	accounts payable-jane co		4800
9-Aug	shippin expense	285
	cash		285
10-Aug	sales return and allowance	760
	accounts payable-ruby co		760
10-Aug	inventory	400
	cost of goods sold		400
12-Aug	accounts payable-jane co	500
	inventory		500
15-Aug	cash	2716
	discount	84
	accounts receivables-green ruby		2800
	(3560-760)*(1-.03)	2716
17-Aug	office equipment	5600
	accounts payable-west co		5600
18-Aug	accounts payable-jane	4300
	cash		4214
	discount		86
	(4800-500)*(1-.02)	4214
19-Aug	accounts receivables-chic	2500
	sales revenue		2500
19-Aug	cost of goods sold	1130
	inventory		1130
22-Aug	sales return & allowance	200
	accounts receivables-chic		200
22-Aug	inventory	90.4
	cost of goods sold		90.4
	(1130/2500)*200	90.4
29-Aug	cash	2254
	discount	46
	accounts receivables-chic		2300
30-Aug	accounts payable-luu	3290
	cash		3290