Question

Required information

Problem 6-3B Record transactions and prepare a partial income statement using a perpetual inventory system (LO6-2, 6-5)

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At the beginning of June, Circuit Country has a balance in inventory of $2,700. The following transactions occur during the month of June.

June		2		Purchase radios on account from Radio World for $2,400, terms 1/15, n/45.
June		4		Pay cash for freight charges related to the June 2 purchase from Radio World, $340.
June		8		Return defective radios to Radio World and receive credit, $200.
June		10		Pay Radio World in full.
June		11		Sell radios to customers on account, $4,400, that had a cost of $2,900.
June		18		Receive payment on account from customers, $3,400.
June		20		Purchase radios on account from Sound Unlimited for $3,500, terms 3/10, n/30.
June		23		Sell radios to customers for cash, $5,000, that had a cost of $3,300.
June		26		Return damaged radios to Sound Unlimited and receive credit of $500.
June		28		Pay Sound Unlimited in full.

Problem 6-3B Part 1

Required:
1. Assuming that Circuit Country uses a perpetual inventory system, record the transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer
Date	Account and Explanation	Debit	Credit
Jun-02	Merchandise inventory	$     2,400
	Account payable- Radio World		$     2,400
	(To record purchase)
Jun-04	Merchandise inventory	$        340
	Cash		$        340
	(To record freight )
Jun-08	Account payable- Radio World	$        200
	Merchandise inventory		$        200
	(To record purchase return)
Jun-10	Account payable ( 2400-200)	$     2,200
	Cash ($2200 * 99%)		$     2,178
	Merchandise inventory		$          22
	(To record amount paid)
Jun-11	Account receivable	$     4,400
	Sales revenue		$     4,400
	(To record sales)
	Cost of goods sold	$     2,900
	Merchandise inventory		$     2,900
	(To record cost of goods sold)
Jun-18	Cash	$     3,400
	Sales discount	$     1,000
	Account receivable		$     4,400
	(To record collection)
Jun-20	Merchandise inventory	$     3,500
	Account payable- Sound Unlimited		$     3,500
	(To record purchase)
Jun-23	Cash	$     5,000
	Sales revenue		$     5,000
	(To record sales)
	Cost of goods sold	$     3,300
	Merchandise inventory		$     3,300
	(To record cost of goods sold)
Jun-26	Account payable- Sound Unlimited	$        500
	Merchandise inventory		$        500
	(To record purchase return)
Jun-28	Account payable (3500-500)	$     3,000
	Cash ($3000 * 97%)		$     2,910
	Merchandise inventory		$          90
	(To record amount paid)