Question

Alpha Company uses the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchases & sales are, 2/10, n30 and the gross method is used. Unless otherwise noted, FOB Destination will apply to all purchases & sales. The value of inventory is based on periodic system. On January 1, 2016, beginning inventory consisted of 400 units of widgets costing $10 each. Alpha prepares monthly income statements. The following events occurred during the month of Jan.:

	Date	Activity
a.	Jan. 3	Purchased on account 350 widgets for $11 each.
b.	Jan. 5	Sold on account 500 widgets for $30 each. Paid freight out with cash of $150.
c.	Jan. 10	Purchased on account 650 widgets for $12 each.
d.	Jan. 11	Shipping cost for the January 10 purchased merchandise was $400 was paid with a cheque by Alpha directly to the freight company.
e.	Jan. 12	Returned 50 widgets received from Jan. 10 purchase as they were not the correct item ordered.
f.	Jan. 13	Paid for the purchases made on Jan. 3.
g.	Jan. 21	Sold on account 550 widgets for $30 each. Paid freight out with cash of $250.
h.	Jan. 22	Authorize credit without return of goods for 50 widgets sold on Jan. 21 when customer advised that they were received in defective condition.
i.	Jan. 25	Received payment for the sale made on Jan. 5.
j.	Jan. 26	Paid for the purchases made on Jan. 10.
k.	Jan. 31	Received payment for the sale made on Jan. 21.

Use this information to prepare the General Journal entries (without explanation) for the January events. If no entry is required then enter the date and write "No Entry Required."

Answer 1

Journal Entries
Date	Account Title and explanation	Debit	Credit
Jan , 03	Inventory	$                     3,850
	To Account Payable		$                       3,850
	(To Record the purchase of widgets)
Jan , 05	Account Receivable	$                  15,000
	To Inventory		$                     15,000
	(to Record the sales )
Jan , 05	Freight	$                        150
	To Cash		$                           150
	(To Record the payment of freight)
Jan, 10	Inventory	$                     7,800
	To Account Payable		$                       7,800
	(To Record the purchase of widgets)
Jan, 11	Freight	$                        400
	To Cash		$                           400
	(To Record the payment of freight)
Jan, 12	Account Payable	$                        600
	To Inventory		$                           600
	(to Record the return of material purchase)
Jan, 21	Account receivable	$                  16,500
	To Sales		$                     16,500
	(To record the sales)
Jan, 22	Freight	$                        250
	To Cash		$                           250
	(To Record the payment of freight)
Jan, 22	Sales	$                     1,500
	To Account Receivable		$                       1,500
	(To record the credit for sales defective)
Jan, 25	Cash	$                  15,000
	to Account Receivable		$                     15,000
	(To record the receipt )
Jan, 26	Account payable	$                     7,200
	To Cash		$                       7,200
	(To record the payment)
Jan, 26	Cash	$                  14,700
	Purchase Discount	$                        300
	To Account Receivable		$                     15,000
	(To Record the receipt)