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10 January, 19:19

DS Unlimited has the following transactions during August. August 6 Purchases 82 handheld game devices on account from GameGirl, Inc., for $260 each, terms 3/10, n/60.

August 7 Pays $460 to Sure Shipping for freight charges associated with the August 6 purchase.

August 10 Returns to GameGirl seven game devices that were defective.

August 14 Pays the full amount due to GameGirl.

August 23 Sells 62 game devices purchased on August 6 for $280 each to customers on account. The total cost of the 62 game devices sold is $16,016.67.

Required:

Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system.

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Answers (1)
  1. 10 January, 22:12
    0
    Solution:

    Inventory 21,320 debit

    A/P 21,320 credit

    --to record purchase from Game Girl - -

    Inventory 360 debit

    Cash 360 credit

    --to record the freight-in--

    A/P 1,560 debit

    Inventory 1,560 credit

    --to record returned goods to GameGirl--

    A/P 19,760 debit

    Inventory 395 credit

    Cash 19,365 credit

    --to record payment to GameGirl--

    accounts receivables 17,360 debit

    sales revenues 17,360 credit

    COGS 8,406 debit

    8,406 credit

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

    total amount of the purchase in dollars:

    82 game devices x 260 dollars each = 21,320

    six returned devices:

    6 x 260 = 1,560

    invoice balance: 21,320 - 1,560 = 19,760

    discount because payment within the first ten days:

    19,760 x 2% = 395

    final value: 19,760 - 395 = 19,365

    sale of 62 devices at 280 = 17,360
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