Question

On September 1, the beginning of its fiscal year, Campus Office Supply Ltd. had an inventory of 122 calculators at a cost of $20 each. The company uses a perpetual inventory system. During September, the following transactions occurred:

Sept.	2		Purchased 915 calculators for $20 each from Digital Corp. on account, terms n/30.
	10		Returned 29 calculators to Digital for $580 credit because they did not meet specifications.
	11		Sold 420 calculators for $30 each to Campus Book Store, terms n/30. Management estimates returns of 4% based on prior experience.
	14		Granted credit of $870 to Campus Book Store for the return of 29 calculators that were not ordered. The calculators were restored to inventory.
	29		Paid Digital the amount owing.
	30		Received payment in full from the Campus Book Store.

Answer 1

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	Campus
	Journal Entry
Date	Account	Debit $	Credit $	Note
2-Sep	Merchandise Inventory	18,300.00		This is 915 units*$ 20
	Accounts Payable		18,300.00
10-Sep	Accounts Payable	580.00
	Merchandise Inventory		580.00
11-Sep	Accounts Receivable	12,600.00		This is 420 units*$ 30
	Sales		12,600.00
11-Sep	Cost of goods sold	8,400.00		This is 420 units*$ 20
	Merchandise Inventory		8,400.00
14-Sep	Sales Returns	870.00
	Accounts Receivable		870.00
11-Sep	Merchandise Inventory	580.00		This is 29 units*$ 20
	Cost of goods sold		580.00
29-Sep	Accounts Payable	17,720.00		This is $ 18,300 less $ 580.
	Cash		17,720.00
30-Sep	Cash	11,730.00		This is $ 12,600 less $ 870.
	Accounts Receivable		11,730.00