Question

Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $4,610 and Owner’s Capital of $4,610.

May 1		Purchased merchandise on account from Braun's Wholesale Supply $4,200, terms 2/10, n/30.
2		Sold merchandise on account $2,100, terms 2/10, n/30. The cost of the merchandise sold was $1,250.
5		Received credit from Braun's Wholesale Supply for merchandise returned $400.
9		Received collections in full, less discounts, from customers billed on sales of $2,100 on May 2.
10		Paid Braun's Wholesale Supply in full, less discount.
11		Purchased supplies for cash $380.
12		Purchased merchandise for cash $1,500.
15		Received refund for poor quality merchandise from supplier on cash purchase $150.
17		Purchased merchandise from Valley Distributors $1,300, FOB shipping point, terms 2/10, n/30.
19		Paid freight on May 17 purchase $160.
24		Sold merchandise for cash $3,420. The merchandise sold had a cost of $2,210.
25		Purchased merchandise from Lumley, Inc. $580, FOB destination, terms 2/10, n/30.
27		Paid Valley Distributors in full, less discount.
29		Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $40.
31		Sold merchandise on account $1,480, terms n/30. The cost of the merchandise sold was $580.

Renner Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Date	General Journal	Debit	Credit
01-May	Merchandise inventory	8,500
	Accounts payable		8,500
02-May	Accounts receivable	2,100
	Sales		2,100
02-May	Cost of goods sold	1,250
	Merchandise inventory		1,250
05-May	Accounts payable	400
	Merchandise inventory		400
09-May	Cash	2,058
	Sales Discounts	42
	Accounts Receivable		2,100
10-May	Accounts payable	4,200
	Cash		4,124
	Merchandise inventory (4200-400)*2%		76
11-May	Supplies	380
	Cash		380
12-May	Merchandise Inventory	1,500
	Cash		1,500
15-May	Cash	150
	Merchandise Inventory		150
17-May	Merchandise inventory	1,300
	Accounts payable		1,300
19-May	Merchandise inventory	160
	Cash		160
24-May	Cash	3,420
	Sales		3,420
24-May	Cost of Goods Sold	2,210
	Merchandise inventory		2,210
25-May	Merchandise Inventory	580
	Accounts payable		580
27-May	Accounts payable	1,300
	Cash		1,274
	Merchandise Inventory		26
29-May	Sales Returns and Allowances	70
	Cash		70
29-May	Merchandise Inventory	40
	Cost of Goods Sold		40
31-May	Accounts Receivable	1,480
	Sales		1,480
31-May	Cost of goods sold	580
	Merchandise Inventory		580