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In: Accounting

Prepare the journal entries for the transactions below: Credit terms for all sales on account are...

Prepare the journal entries for the transactions below:

Credit terms for all sales on account are 2/10, n/30. Huff Fitness uses a perpetual inventory system and therefore records the cost of merchandise sold as well as the sale.

Apr 2     Received a check for $14,406.00 from Extreme Fitness Club in payment of our invoice of March 27 for $14,700 less discount.

Apr 2     Issued Check # 2202 for $6,720.00 to Harvey Insurance Company as a prepayment of insurance for a 12-month policy.

Apr 3     Issued check #2203 for $46,480.00 to Fitness Network in payment of its invoice of March 27 (no discount).

Apr 3     Sold merchandise on account, Invoice 302, to Day & Night Fitness Centers for $12,162.50. COGS is $7,784.00.

Solutions

Expert Solution

Journal Entries - Huff Fitness ( Perpetual)
Apr-02 Cash 14406
Sales discount 294
Sales revenue 14700
Apr-02 Prepaid insurance 6720
Cash 6720
Apr-03 Accounts Payable 46480
Cash 46480
Apr-03 Accounts Receivable 12162.5
Sales revenue 12162.5
Apr-03 COGS 7784
Inventory 7784

ekkarill92 answered 2 years ago
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