Question

DS Unlimited has the following transactions during August. August 6 Purchases 84 handheld game devices on account from GamerGirl, Inc., for $270 each, terms 2/10, n/60. August 7 Pays $470 to Sure Shipping for freight charges associated with the August 6 purchase. August 10 Returns to GamerGirl nine game devices that were defective. August 14 Pays the full amount due to GameGirl. August 23 Sells 64 game devices purchased on August 6 for $290 each to customers on account. The total cost of the 64 game devices sold is $17,335.00.

Required: Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.)

Answer 1

Answer:

Explanation:

The journal entries are shown below:

On August 6

Merchandise Inventory A/c Dr $22,680   (84 handheld games × $270)

            To Account payable A/c $22,680

(Being the inventory purchased is recorded)

On August 7

Merchandise Inventory A/c Dr $470

      To Cash A/c $470

(Being the freight cost is paid)

On August 10

Account payable A/c $2,430       (9 handheld games × $270)

       To Merchandise inventory A/c  $2,430

(Being the goods are returned)

On August 14

Account payable A/c Dr $20,250    ($22,680 - $2,430)

        To Merchandise Inventory A/c $405      ($20,250 × 2%)

        To Cash A/c $19,845

(Being the amount due is paid)

On August 23

Accounts Receivable A/c Dr $18,560     (64 handheld games × $290)

        To Sales revenue A/c $18,560

(Being the sales on credit basis is recorded)

Cost of goods sold A/c Dr $17,335

       To Merchandise Inventory A/c  $17,335

(Being the total cost is recorded)