Question

1.	On October 1, BSS placed an order for 100 golf shirts at a unit cost of $21, under terms 2/10, n/30. Record the place of the order for golf shirts.
2.	The order placed on October 1 was received by BSS on October 10, but 10 golf shirts had been damaged in shipment. Record the inventory purchased on account.
3.	On October 11, the 10 damaged golf shirts were returned. Record the return of the damaged inventory.
4.	On October 12, BSS complained that the remaining golf shirts were slightly defective so the supplier grated a $290 allowance. Record the allowance received for the defective inventory purchased.
5.	On October 13, BSS paid for the golf shirts. Record the payment in full.
6.	During the first week of October BSS received student and faculty orders for 90 golf shirts, at a unit price of $39.00, on terms 2/10, n/30. The golf shirts were delivered to the customers on October 18. Record the sales revenue on account for the order.
7.	During the first week of October BSS received student and faculty orders for 90 golf shirts, at a unit price of $39.00, on terms 2/10, n/30. The golf shirts were delivered to the customers on October 18. Record the cost of goods sold for the order.
8.	Customers were unhappy with the golf shirts, so BSS permitted them to be returned or gave an allowance of $9.00 per shirt. On October 21, one-half of the golf shirts were returned by customers. Record the return of the unsatisfactory merchandise sold on account.
9.	Customers were unhappy with the golf shirts, so BSS permitted them to be returned or gave an allowance of $9.00 per shirt. On October 21, one-half of the golf shirts were returned by customers. Record the cost of goods returned.
10.	Customers were unhappy with the golf shirts, so BSS permitted them to be returned or gave an allowance of $9.00 per shirt. On October 22, the remaining 45 customers were granted the allowance. Record the allowance granted for the defective inventory sold on account.
11.	On October 25, the customers paid their remaining balances due on account. Record the customers' payments in full.
12.	As of October 31, the payment of inventory ordered in full dated October 13 had not yet cleared the bank. Record the Otober 13 check that had not yet cleared the bank.

value:
1.33 points

Required information

C6-1 Part 1

Required:
1b.	Prepare journal entries for the transactions described above, using the date of each transaction as its reference. Assume BSS uses perpetual inventory accounts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1a.

Report the financial effects of the above transactions in a multistep income statement for the month ended October 31 prepared for internal use. Assume operating expenses, other than cost of goods sold, are $100 and income tax expense is $135.

Answer 1

Journal Entry
S.no.	Date	Particulars	Dr. Amt.	Cr. Amt.
1	1-Oct	No Entry
2	10-Oct	Inventory	2,100.00		$21 X 100 Nos
		Accounts Payable		2,100.00	$21 X 100 Nos
		(To record the shirts purchased)
3	11-Oct	Accounts Payable	210.00		$21 X 10 Nos
		Inventory		210.00
		(To record the shirts return)
4	12-Oct	Accounts Payable	290.00
		Inventory		290.00
		(To record the allowance recd on defective shirts)
5	13-Oct	Accounts Payable	1,600.00
		Cash		1,568.00	$1,600 X 98%
		Inventory		32.00	$1,600 X 2%
		(to record the cash paid)
6	18-Oct	Accounts Receivable	3,510.00		90 shirts X $39
		Sales Revenue		3,510.00	90 shirts X $39
		(To record the sales of shirts)
	18-Oct	Cost of Goods Sold	1,568.00
		Inventory		1,568.00
		(To recor the cost of goods sold)
8	21-Oct	Sales Return & Allowance	1,755.00		45 Shirts X $39
		Accounts Receivable		1,755.00
		(Record the sales return)
	21-Oct	Inventory	784.00		$1,568 / 2
		Cost of Goods Sold		784.00	$1,568 / 2
		(To Record the cost of goods sold of sales retun)
10	22-Oct	Sales Return & Allowances	405.00		45 Shirts X $9
		Accounts Receivable		405.00
		(Record the allownces given)
11	25-Oct	Cash	1,323.00		$1,350 X 98%
		Sales Return & Allowances	27.00		$1,350 X 2%
		Accounts Receivable		1,350.00
		(to record the cash received)
12	31-Oct	No Entry.

Multistep Income Statement
For the Month Ended OC 31
Sales Revenue	3,510.00
Less: Sales Return	(2,187.00)	1,323.00
Cost of Goods Sold		784.00
Gross Margin		539.00
Less: Expense
Operaring Expense		100
Net Operating Income		439.00
Less: Income Tax		135
Net Income		304.00