DS Unlimited has the following transactions during August. August 6 Purchases 66 handheld game devices on account from GameGirl, Inc., for $180 each, terms 2/10, n/60. August 7 Pays $380 to Sure Shipping for freight charges associated with the August 6 purchase. August 10 Returns to GameGirl six game devices that were defective. August 14 Pays the full amount due to GameGirl. August 23 Sells 46 game devices purchased on August 6 for $200 each to customers on account. The total cost of the 46 game devices sold is $8,406.00.

Inventory 11,880 debit

A/P 11,880 credit

--to record purchase from GameGirl - -

Inventory 360 debit

Cash 360 credit

--to record the freigh-in--

A/P 1,080 debit

Inventory 1,080 credit

--to record returned goods to GameGirl--

A/P 10,800 debit

Inventory 216 credit

Cash 10,584 credit

--to record payment to GameGirl--

accounts receivables 9,200 debit

sales revenues 9,200 credit

COGS 8,406 debit

8,406 credit

--to record sale and subsequent cost of the sale--

Explanation:

total amount of hte purchase in dollars:

66 game devices x 180 dollars each = 11,880

six returned devices:

6 x 180 = 1,080

invoice balance: 11,880 - 1,080 = 10,800

discount because payment within the first ten days:

10,800 x 2% = 216

final value: 10,800 - 216 = 10,584

sale of 46 devices at 200 = 9,200