Question

In: Accounting

Selected transactions follow for Covington Sports Ltd. during the company’s first month of business. The company...

Selected transactions follow for Covington Sports Ltd. during the company’s first month of business. The company expects a return rate of 8% and uses a perpetual inventory system.

Feb. 2 Sold $1,135 of merchandise to Andrew Noren on account, terms n/30. The goods had cost Covington $758.
4 Andrew Noren returned for credit $141 of the merchandise purchased on February 2. The goods had cost Covington $84 and they were returned to inventory.
5 Sold $762 of merchandise to Dong Corporation on account, terms n/30. The goods had cost Covington $486.
8 Sold $839 of merchandise to Michael Collins for cash. The goods had cost Covington $621.
10 Sold $920 of merchandise to Rafik Kurji account, terms n/30. The goods had cost Covington $677.
22 Dong Corporation paid its account in full.
24 Andrew Noren purchased an additional $690 of merchandise on account, terms n/30. The goods had cost Covington $414.
27 Sold $1,743 of merchandise to Batstone Corporation, terms n/30. The goods had cost Covington $1,100.
28 Andrew Noren paid $994 on account.

(a)

Prepare the journal entries to record each of the above transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to the nearest whole dollar, e.g. 5,275.)

Solutions

Expert Solution

Feb 2 Accounts Receivable A/C Dr. $1,135
To Sales A/C $1,135
Feb 2 Cost of goods sold A/C Dr. $758
To Merchandise A/C $758
Feb 4 Sales returns A/C Dr. $141
To Accounts Receivable A/C $141
Feb 4 Merchandise A/C Dr. $84
To Cost of goods sold A/C $84
Feb 5 Accounts Receivable A/C Dr. $762
To Sales A/C $762
Feb 5 Cost of goods sold A/C Dr. $486
To Merchandise A/C $486
Feb 8 Cash A/C Dr. $839
To Sales A/C $839
Feb 8 Cost of goods sold A/C Dr. $621
To Merchandise A/C $621
Feb 10 Accounts Receivable A/C Dr. $920
To Sales A/C $920
Feb 10 Cost of goods sold A/C Dr. $677
To Merchandise A/C $677
Feb 22 Cash A/C Dr. $762
To Accounts Receivable A/C $762
Feb 24 Accounts Receivable A/C Dr. $690
To Sales A/C $690
Feb 24 Cost of goods sold A/C Dr. $414
To Merchandise A/C $414
Feb 27 Accounts Receivable A/C Dr. $1,743
To Sales A/C $1,743
Feb 27 Cost of goods sold A/C Dr. $1,100
To Merchandise A/C $1,100
Feb 28 Cash A/C Dr. $994
To Accounts Receivable A/C $994

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