Question

Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June, Jordan engaged in the following transactions its first month of operations: June Transactions:

June 1 Jordan purchased, on credit, 100 pairs of basketball shoes and 210 pairs of running shoes with credit terms of 2/10, n/30. The basketball shoes were purchased at a cost of $85 per pair, and the running shoes were purchased at a cost of $60 per pair. Jordan paid Mole Trucking $310 cash to transport the shoes from the manufacturer to Jordan’s warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on June 1 and arrived on June 4.

2 Jordan purchased 88 pairs of cross-training shoes for cash. The shoes cost Jordan $65 per pair.

6 Jordan purchased 125 pairs of tennis shoes on credit. Credit terms were 2/10, n/ 25. The shoes were purchased at a cost of $45 per pair.

10 Jordan paid for the basketball shoes and the running shoes purchased on June 1.

12 Jordan determined that $585 of the tennis shoes were defective. Jordan returned the defective merchandise to the manufacturer.

18 Jordan sold 50 pairs of basketball shoes at $116 per pair, 92 pairs of running shoes for $85 per pair, 21 pairs of cross-training shoes for $100 per pair, and 48 pairs of tennis shoes for $68 per pair. All sales were for cash. The cost of the merchandise sold was $13,295.

21 Customers returned 10 pairs of the basketball shoes purchased on June 18. The cost of the merchandise returned was $850.

23 Jordan sold another 20 pairs of basketball shoes, on credit, for $116 per pair and 15 pairs of cross-training shoes for $100 cash per pair. The cost of the merchandise sold was $2,675.

30 Jordan paid for the June 6 purchase of tennis shoes minus the return on June 12.

30 Jordan purchased 60 pairs of basketball shoes, on credit, for $85 each. The shoes were shipped F.O.B. destination and arrived at Jordan on July 3. With the given information create a general journal and an income statement.

With the given information create a general journal and an income statement.

Answer 1

1-Jun		Merchandise Inventory			21100
		To Accounts Payable				21100
		(100*85) + (210*60)
		(Being basketball shoes and running shoes purchased on account)
		Merchandise Inventory			$310
		To Cash				$310
		(Being freight charges paid)
2-Jun		Merchandise Inventory			5720
		To Cash				5720
		(88*65)
		(Being cross training shoes purchased)
6-Jun		Merchandise Inventory			5625
		To Accounts Payable				5625
		(Being tennis shoes purchased)
10-Jun		Accounts Payable			21100
		To Cash				20678
		To Merchandise Inventory				422
12-Jun		Accounts Payable			$585
		To Merchandise Inventory				$585
18-Jun		Cost of Goods Sold			$13,295
		To Merchandise Inventory				$13,295
		Accounts Receivable			18984
		To Sales				18984
		(50*116) + (92*85) + (21*100) + (48*68)
21-Jun		Sales Returns and Allowances			1160
		To Accounts receivable				1160
		Merchandise Inventory			850
		To Cost of Goods Sold				850
23-Jun		Cost of Goods Sold			2675
		To Merchandise Inventory				2675
		Accounts Receivable			3820
		To Sales				3820
		(20*116) + (15*100)
30-Jun		Accounts Payable			5040
		To Cash				5040
30-Jun		Merchandise Inventory			5100
		To Accounts Payable				5100
		Income Statement
		Sales			24024
		Less : Sales Returns			1160
		Sales (Net)				22864
		Less : Cost of Goods Sold				$15,120
		Gross Profit				$7,744