Click Computers has the following transactions in July related to purchasing and sale of merchandise inventory.
July 1 Purchase of $20,500 worth of computers on account, terms of 2/10, n/30.
3 Return of $4,000 of the computers to the vendor.
9 Payment made on the account.
12 Sold computers on account for $8,000 to a customer, terms 3/15, n/30.
26 Received payment from customer on balance due.
Journalize the transactions for Click Computers assuming that the company uses the periodic inventory system.
The total debit and credit of the journal are $56,760.
An inventory system that periodically updates the inventory transactions is termed a periodic inventory system. Under this system, a business entity updates its inventory accounts at the end of an accounting period and tracks its beginning and closing inventories.
Accounts and Explanation
(To record the purchase of computers)
(To record the return of goods)
(To record the payment within the discount period)
(To record the sale of computers)
(Cash received within the discount period)
Kingston Tires received the following invoice from a supplier (Fields Distribution, Inc.):
1. Journalize the transaction required by Kingston Tires on September 23, 2018. Do not round numbers to the nearest whole dollar. Assume tires are purchased on account.
2. Journalize the return on Kingston’s books on September 28, 2018, of the D39–X4 Radials, which were ordered by mistake. Do not round numbers to the nearest whole dollar.
3. Journalize the payment on October 1, 2018, to Fields Distribution, Inc. Do not round numbers to the nearest whole dollar.
Journalize the following sales transactions for Sanborn Camera Store using the periodic inventory system. Explanations are not required.
Dec. 3, Sanborn sold $41,900 of camera equipment on the account; credit terms are 3/15, n/EOM.
17 Sanborn receives payment from the customer on the amount due to less the discount.
Taylor Department Store uses a periodic inventory system. The adjusted trial balance of Taylor Department Store at December 31, 2018, follows:
TAYLOR DEPARTMENT STORE
Adjusted Trial Balance
December 31, 2018
Account Title Debit Credit
Accounts Receivable 85,300
Merchandise Inventory (beginning) 37,600
Office Supplies 300
Accumulated Depreciation-Furniture $18,500
Accounts Payable 28,500
Salaries Payable 2,900
Unearned Revenue 14,500
Notes Payable, long-term 32,000
Common Stock 20,000
Retained Earnings 45,400
Sales Revenue 380,800
Purchase Returns and Allowances 110,000
Purchase Discounts 7,000
Selling Expense 42,900
Administrative Expense 26,300
Interest Expense 3,200
Total $659,600 $659,600
1. Prepare Taylor Department Store’s multi-step income statement for the year ended December 31, 2018. Assume ending Merchandise Inventory is $36,700.
2. Journalize Taylor Department Store’s closing entries.
Howie Jewelers had the following purchase transactions. Journalize all necessary transactions. Explanations are not required.
Jun. 20 Purchased inventory of $5,100 on account from Sanders Diamonds, a jewelry importer. Terms were 2/15, n/45, FOB shipping point.
20 Paid freight charges, $400.
Jul. 4 Returned $600 of inventory to Sanders.
14 Paid Sanders Diamonds, less return.
16 Purchased inventory of $3,500 on account from Southboro Diamonds, a jewelry importer. Terms were 2/10, n/EOM, FOB destination.
18 Received a $300 allowance from Southboro Diamonds for damaged but usable goods.
24 Paid Southboro Diamonds, less allowance, and discount.
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