Campus Stop Inc. is a student co-op. On January 1 of the current year, the beginning inventory was $150,000, the trade receivables balance was $4,000, and the allowance for doubtful accounts had a credit balance of $800. Campus Stop uses a perpetual inventory system. The following transactions (summarized) occurred during the current year: a. Sold merchandise for $275,000 cash; the cost of sales is $137,500. b. Purchased merchandise from vendors on credit, terms 3/10, n/30, as follows: i. August Supply Company, invoice price, $5,000. ii. Other vendors, invoice price, $120,000. c. Purchased equipment for use in store for cash, $2,200. d. Purchased office supplies for future use in the store; paid cash, $700. e. Paid freight on merchandise purchased, $400 cash. f. Paid accounts payable in full during the period as follows: i. Paid August Supply Company after the discount period, $5,000. ii. Paid other vendors within the discount period, $116,400. Required: Prepare journal entries for each of the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Campus Stop Inc. is a student co-op. On January 1 of the current year, the beginning inventory was $150,000, the trade
receivables balance was $4,000, and the allowance for doubtful accounts had a credit balance of $800. Campus Stop uses a
perpetual inventory system.
The following transactions (summarized) occurred during the current year:
a. Sold merchandise for $275,000 cash; the cost of sales is $137,500.
b. Purchased merchandise from vendors on credit, terms 3/10, n/30, as follows:
i. August Supply Company, invoice price, $5,000.
ii. Other vendors, invoice price, $120,000.
c. Purchased equipment for use in store for cash, $2,200.
d. Purchased office supplies for future use in the store; paid cash, $700.
e. Paid freight on merchandise purchased, $400 cash.
f. Paid accounts payable in full during the period as follows:
i. Paid August Supply Company after the discount period, $5,000.
ii. Paid other vendors within the discount period, $116,400.
Required:
Prepare journal entries for each of the preceding transactions. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
Transcribed Image Text:Campus Stop Inc. is a student co-op. On January 1 of the current year, the beginning inventory was $150,000, the trade receivables balance was $4,000, and the allowance for doubtful accounts had a credit balance of $800. Campus Stop uses a perpetual inventory system. The following transactions (summarized) occurred during the current year: a. Sold merchandise for $275,000 cash; the cost of sales is $137,500. b. Purchased merchandise from vendors on credit, terms 3/10, n/30, as follows: i. August Supply Company, invoice price, $5,000. ii. Other vendors, invoice price, $120,000. c. Purchased equipment for use in store for cash, $2,200. d. Purchased office supplies for future use in the store; paid cash, $700. e. Paid freight on merchandise purchased, $400 cash. f. Paid accounts payable in full during the period as follows: i. Paid August Supply Company after the discount period, $5,000. ii. Paid other vendors within the discount period, $116,400. Required: Prepare journal entries for each of the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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