Question:
[This is a variation of Exercise 8-1 modified to focus on the periodic inventory system.]
John’s Specialty Store uses a periodic inventory system. The following are some inventory transactions
for the month of May 2013:
1. John’s purchased merchandise on account for $5,000. Freight charges of $300 were paid in cash.
2. John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $600 and
John’s account was credited by the supplier.
3. Merchandise costing $2,800 was sold for $5,200 in cash.
Required:
Prepare the necessary journal entries to record these transactions.
Answer:
1. To record the purchase of inventory on account and the payment of freight charges.
Purchases............................................................................................... 5,000
Accounts payable.............................................................................. 5,000
Freight-in............................................................................................... 300
Cash.................................................................................................. 300
2. To record purchase returns.
[This is a variation of Exercise 8-1 modified to focus on the periodic inventory system.]
John’s Specialty Store uses a periodic inventory system. The following are some inventory transactions
for the month of May 2013:
1. John’s purchased merchandise on account for $5,000. Freight charges of $300 were paid in cash.
2. John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $600 and
John’s account was credited by the supplier.
3. Merchandise costing $2,800 was sold for $5,200 in cash.
Required:
Prepare the necessary journal entries to record these transactions.
Answer:
1. To record the purchase of inventory on account and the payment of freight charges.
Purchases............................................................................................... 5,000
Accounts payable.............................................................................. 5,000
Freight-in............................................................................................... 300
Cash.................................................................................................. 300
2. To record purchase returns.
