Question

Problem 1: Record the Journal Entry or Entries for the following transactions assuming a perpetual inventory system is used.

1. XYZ Corp. is a retailer and they purchase 10,000 books for $25,000 dollars on account from ABC Corp.

2. Assume the terms of the sale described in #1 are FOB shipping point, XYZ Corp. pays Just-In-Time Logistics $2,200 for shipping.

3. XYZ Corp. purchases 3,600 calculators for $130,000 dollars from ABC Corp. under the terms 2/10, n/30 on March 1, 20X5. On March 8, 20X5 XYZ Corp. paid ABC Corp. in full.

4. XYZ Corp. purchases 300 keyboards from ABC Corp. for $24,000 on account on October 5, 20X4. On October 17, 20X4 XYZ Corp. discovered that $800 of the calculators (from the purchase in #3) were defective and returned them to ABC Corp.

5. XYZ Corp. sells 500 pencil cases to ABC Corp. at a selling price of $12, the cases had an original cost of $8.

6. Assume that after the sale described in #5 ABC Corp. returned 25 pencil cases to XYZ Corp. Assume the cases are still like new and XYZ places them back into inventory.

7. On April 15, 20X4, XYZ Corp. sells 500 cases of staples to State University on account for $1,500 with the payment terms 2/10, n/30 and the staples had a cost of $925. State University pays XYZ Corp. in full on April 24, 20X4.

Answer 1

In the books of XYZ Corp. :

Transaction / Event	Date	Account Titles	Debit	Credit
			$	$
1.		Merchandise Inventory	25,000
		Accounts Payable: ABC Corp		25,000
2.		Merchandise Inventory	2,200
		Cash		2,200
3.	Mar 1	Merchandise Inventory	127,400
		Accounts Payable: ABC Corp		127,400
3.	Mar 8	Accounts Payable: ABC Corp	127,400
		Cash		127,400
4.	Oct 5	Merchandise Inventory	24,000
		Accounts Payable: ABC Corp		24,000
4.	Oct 17	Accounts Payable: ABC Corp	800
		Merchandise Inventory		800
5.		Accounts Receivable: ABC Corp.	6,000
		Sales		6,000
5.		Cost of Goods Sold	4,000
		Merchandise Inventory		4,000
6.		Sales Returns & Allowances	300
		Accounts Receivable: ABC Corp.		300
6.		Merchandise Inventory	200
		Cost of Goods Sold		200
7.	Apr 15, 20X4	Accounts Receivable: State University	1,500
		Sales		1,500
7.	Apr 15, 20X4	Cost of Goods Sold	925
		Merchandise Inventory		925
7.	Apr 24, 20X4	Cash	1,470
		Sales Discount	30
		Accounts Receivable: State University		1,500