Week 4
Prepare general journal entries to record the following transactions relating to Saints Trading. The perpetual inventory system is used.
Date (2009)
Transactions
2 May
Purchased inventory costing $4000 on credit
4 May
Returned defective goods, which cost $800
10 May
Sold goods for $1800 (cost price $1000) These were $1000 cash sales, remaining $800 sold on credit. Credit terms on the remainder of the goods sold were 2/10, n/30
12 May
Goods costing $300 that were sold on credit for $400 were returned by the customer
GENERAL JOURNAL
Date
(2009)
Account Title
Debit
Credit
May 2
Inventory
4000
Accounts Payable
4000
4
Accounts Payable
800
Inventory
800
10
Accounts Receivable
800
Cash
1000
Sales
1800
Cost of Goods Sold
1000
Inventory
1000
12
Sales Returns
400
Accounts Receivable
400
Inventory
300
Cost of Goods Sold
300
Harry Traders uses the perpetual inventory recording method
The following ledger account details provided for Harry Traders at 30 June 2013
Inventory
1/7/12
Balance
25 000
30/6/13
Cost of Goods Sold
330 000
30/6/13
Accounts Payable
340 000
Stock Loss
2 000
Cost of Goods Sold
1 000
Accounts Payable
20 000
Balance
14 000
366 000
366 000
Show how the cost of goods sold, inventory, purchases and purchase returns accounts would appear in the ledger if the periodic inventory method of inventory recording had been used.
Inventory