Question

Problem 6-66A (Algorithmic)

Recording Sale and Purchase Transactions

Alpharack Company sells a line of tennis equipment to retailers. Alpharack uses the perpetual inventory system and engaged in the following transactions during April 2019, its first month of operations:

1. On April 2, Alpharack purchased, on credit, 320 Wilbur T-100 tennis rackets with credit terms of 2/10, n/30. The rackets were purchased at a cost of $30 each. Alpharack paid Barker Trucking $150 to transport the tennis rackets from the manufacturer to Alpharack's warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on April 2.

2. On April 3, Alpharack purchased, for cash, 150 packs of tennis balls for $10 per pack.

3. On April 4, Alpharack purchased tennis clothing, on credit, from Designer Tennis Wear. The cost of the clothing

   was $8,000. Credit terms were 2/10, n/25.

4. On April 10, Alpharack paid for the purchase of the tennis rackets in Transaction a.

5. On April 15, Alpharack determined that $500 of the tennis clothing was defective. Alpharack returned the

   defective merchandise to Designer Tennis Wear.

6. On April 20, Alpharack sold 100 tennis rackets at $90 each, 100 packs of tennis balls at $12 per pack, and

   $4,000 of tennis clothing. All sales were for cash. The cost of the merchandise sold was $5,420.

7. On April 23, customers returned $575 of the merchandise purchased on April 20. The cost of the merchandise

   returned was $300.

8. On April 25, Alpharack sold another 50 tennis rackets, on credit, for $90 each and 25 packs of tennis balls at

   $12 per pack, for cash. The cost of the merchandise sold was $2,000.

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i. On April 29, Alpharack paid Designer Tennis Wear for the clothing purchased on April 4 minus the return on April 15.

j. On April 30, Alpharack purchased 20 tennis bags, on credit, from Bag Designs for $320. The bags were shipped F.O.B. destination and arrived at Alpharack on May 3.

Required:

1. Prepare the journal entries to record the sale and purchase transactions for Alpharack during April 2019. If no entry is required, select "No entry required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

Date	General Journal	Debit	Credit
2nd April	Mercendise Inventory-Wilbur T-100 Tennis Rackets(320*$30)	$    9,600
	To Accounts Payable		$    9,600
	(Being amount of tennis Racket Purchased on Credit at the rate of $30)
2nd April	Mercendise Inventory	$        150
	To Cash		$        150
	(Being Amount of freight charges paid)
3rd April	Mecendise Inventory-Tennis Balls(150*$10)	$    1,500
	To Cash		$    1,500
	(Being amount of tennis Balls Purchased on Credit at the rate of $10)
4th April	Mercendise Inventory-Tennis Clothings	$    8,000
	To Designer Tenniswear		$    8,000
	(Being Amount of Tennis Clothing Purchased from Designer Tenniswear)
10th April	Accounts Payable	$    9,600
	To Cash		$    9,408
	To Discount received($9600*2%)		$        192
	(being Amount Paid for tennis Racket purchased on 2nd April after receiveing 2% cash discount because payment within 10 days)
15th April	Designer Tenniswear	$        500
	To Mercendis Inventory-Tennis clothing		$        500
	(Being Amount of defective cloth retuned to Designer Wear)
20th April	Cash	$ 14,200
	To sales		$ 14,200
	(being Amount of cash Sales(100 Tennis Racket+100 Tennis Balls & amount of $4000 of Tennis Cloth)
20th April	Cost of goods sold	$    5,420
	Inventory		$    5,420
	(Being Amount of Cost of goods sold)
23rd April	Sales Return & Allowances	$        575
	To Cash		$        575
	(Being Amount of sales return assume clothing)
23rd April	Mercendise Inventory	$        300
	To Cost of goods sold		$        300
	(being Amount of cost of goods returned)
25th April	Cash(50*$90+25*$12+250)	$    5,050
	To Sales		$    5,050
	(being Amount of Sales of (50 Tennis Racket+25 Tennis balls and )
25th April	Cost of goods sold	$    2,000
	Inventory		$    2,000
	(being Amount ofcost of goods sold)
29th April	Designer Tennis Wear($8000-$500)	$    7,500
	To Cash		$    7,500
	(being amount paid to Designer tennis wear without cah discount because payment was not made in 10 days)
30th April	No Entry
	(Ownership usually passes from the seller to buyer when goods are received In this case goods are received on May so entry will be passed)