Question

Journal Entries for Merchandise Transactions—Perpetual System

Rockford Corporation, which began business on August 1, sells on terms of 2/10, n/30. Credit terms for its purchases vary with the supplier. Selected transactions for August are given below. Unless noted, all transactions are on account and involve merchandise held for resale. The perpetual inventory system is used.

Aug.	1	Purchased merchandise from Norris, Inc., $3,880, terms 2/10, n/30.
	5	Paid freight on shipment from Norris, Inc., $200.
	7	Sold merchandise to Denton Corporation, $5,200 ($3,800 cost).
	7	Paid $280 freight on August 7 shipment and billed Denton for the charges.
	9	Returned $680 worth of the merchandise purchased August 1 from Norris, Inc., because it was defective. Norris approved the return.
	9	Received $1,200 of returned merchandise ($1,000 cost) from Denton Corporation. Rockford approved the return.
	10	Paid Norris, Inc., the amount due.
	14	Purchased from Chambers, Inc., goods with a price of $8,400. Terms 1/10, n/30.
	15	Paid freight on shipment from Chambers, Inc., $320.
	17	Received the amount due from Denton Corporation.
	18	Sold merchandise to Weber, Inc., $10,000 ($7,000 cost).
	20	Paid $360 freight on August 18 shipment and billed Weber for the charges.
	24	Paid Chambers, Inc., the amount due.
	28	Received the amount due from Weber, Inc.

Required

Prepare journal entries for these transactions for Rockford Corporation. Round your answers to the nearest dollar.

GENERAL JOURNAL
Date		Description	Debit	Credit
Aug.	1	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Purchases from Norris, Inc., 2/10, n/30.
	5	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Paid freight on Norris, Inc., shipment.
	7	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Sales to Denton Corporation.
	7	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Cost of goods sold to Denton Corporation.
	7	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Paid freight on shipment to Denton Corporation and billed Denton.
	9	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Returned goods to Norris, Inc.
	9	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Issued credit memo to Denton for goods returned.
	9	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Cost of goods returned by Denton Corporation.
	10	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Cash	Answer	Answer
		Paid Norris, Inc., the amount due.
	14	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Purchases from Chambers, Inc., 1/10, n/30.
	15	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Paid freight on Chambers shipment.
	17	Cash	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Received amount due from Denton Corporation.
	18	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Sales to Weber, Inc.
	18	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Cost of goods sold to Weber, Inc.
	20	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Paid freight on shipment to Weber, Inc., and billed Weber.
	24	AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Cash	Answer	Answer
		Paid Chambers, Inc., the amount due.
	28	Cash	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableCashCost of Goods SoldInventorySales RevenueSales Returns and AllowancesSales Discounts	Answer	Answer
		Received amount due from Weber, Inc.

Answer 1

Date	Account Name	Debit	Credit
Aug-01	Merchandise Inventory	$3,880.00
	Accounts Payable - Norris Inc		$3,880.00
	(To Record Merchandise Purchased On Credit)
Aug-05	Merchandise Inventory	$200.00
	Cash		$200.00
	(To Record Payment Of Freight)
Aug-07	Accounts Receivable - Denton Corporation	$5,200.00
	Cost Of Goods Sold	$3,800.00
	Sales Revenue		$5,200.00
	Merchandise Inventory		$3,800.00
	(To Record Sale Of Merchandise On Credit)
Aug-07	Accounts Receivable - Denton Corporation	$280.00
	Cash		$280.00
	(To Record Payment Of Freight And Charged To Denton)
Aug-09	Accounts Payable - Norris Inc	$680.00
	Merchandise Inventory		$680.00
	(To Record Return Of Merchandise Purchased)
Aug-09	Sales Returns And Allowances	$1,200.00
	Merchandise Inventory	$1,000.00
	Accounts Receivable - Denton Corporation		$1,200.00
	Cost Of Goods Sold		$1,000.00
	(To Record Return Of Merchandise Sold)
Aug-10	Accounts Payable - Norris Inc	$3,200.00
	Merchandise Inventory ($3200 X 2%)		$64.00
	Cash		$3,136.00
	(To Record Payment To Norris Inc On Account)
Aug-14	Merchandise Inventory	$8,400.00
	Accounts Payable - Chambers Inc		$8,400.00
	(To Record Purchase Of Goods On Account)
Aug-15	Merchandise Inventory	$320.00
	Cash		$320.00
	(To Record Payment Of Freight On Purchases)
Aug-17	Cash	$6,546.40
	Sales Discounts ($6,680 X 2%)	$133.60
	Accounts Receivable - Denton Corporation		$6,680.00
	(To Record Receipt Of Amount Due)
Aug-18	Accounts Receivable - Weber Inc	$10,000.00
	Cost Of Goods Sold	$7,000.00
	Sales Revenue		$10,000.00
	Merchandise Inventory		$7,000.00
	(To Record Sale Of Goods On Account)
Aug-20	Accounts Receivable - Weber Inc.	$360.00
	Cash		$360.00
	(To Record Payment Of Freight And Charged To Customer)
Aug-24	Accounts Payable - Chambers Inc	$8,400.00
	Merchandise Inventory ($8,400 X 2%)		$168.00
	Cash		$8,232.00
	(To Record Payment For Merchandise Purchased On Account)
Aug-28	Cash	$10,152.80
	Sales Discounts ($10,360 X 2%)	$207.20
	Accounts Receivable - Weber Inc.		$10,360.00