Pharoah Corp. uses a perpetual inventory system. The company had the following inventory transactions in April: April 3 Purchased merchandise from Pronghorn Ltd. for $32,000, terms 2/10, n/30, FOB shipping point. 6 The appropriate company paid freight costs of $800 on the merchandise purchased on April 3. 7 Purchased supplies on account for $5,200. 8 Returned merchandise to Pronghorn and received a credit of $3,000. The merchandise was returned to inventory for future resale. 30 Paid the amount due to Pronghorn in full. Additional information: 1. The cost of the merchandise sold on April 3 was $21,700. 2. The cost of the merchandise returned on April 8 was $1,950. 3. Pronghorn uses a perpetual inventory system. Record the transactions in the books of Pronghorn. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amount in the relevant debit OR credit box. Entering zero in ALL boxes will result in the question being marked incorrect. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation = (To record credit sale) (To record cost of merchandise sold) (To record return of goods) (To record cost of merchandise returned) Debit Credit
Pharoah Corp. uses a perpetual inventory system. The company had the following inventory transactions in April: April 3 Purchased merchandise from Pronghorn Ltd. for $32,000, terms 2/10, n/30, FOB shipping point. 6 The appropriate company paid freight costs of $800 on the merchandise purchased on April 3. 7 Purchased supplies on account for $5,200. 8 Returned merchandise to Pronghorn and received a credit of $3,000. The merchandise was returned to inventory for future resale. 30 Paid the amount due to Pronghorn in full. Additional information: 1. The cost of the merchandise sold on April 3 was $21,700. 2. The cost of the merchandise returned on April 8 was $1,950. 3. Pronghorn uses a perpetual inventory system. Record the transactions in the books of Pronghorn. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amount in the relevant debit OR credit box. Entering zero in ALL boxes will result in the question being marked incorrect. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation = (To record credit sale) (To record cost of merchandise sold) (To record return of goods) (To record cost of merchandise returned) Debit Credit
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 7MCQ
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Transcribed Image Text:Pharoah Corp. uses a perpetual inventory system. The company had the following inventory transactions in April:
April
3
Purchased merchandise from Pronghorn Ltd. for $32,000, terms 2/10, n/30, FOB shipping point.
6
The appropriate company paid freight costs of $800 on the merchandise purchased on April 3.
7
Purchased supplies on account for $5,200.
8
Returned merchandise to Pronghorn and received a credit of $3,000. The merchandise was returned to inventory
for future resale.
30
Paid the amount due to Pronghorn in full.
Additional information:
1.
The cost of the merchandise sold on April 3 was $21,700.
2.
The cost of the merchandise returned on April 8 was $1,950.
3.
Pronghorn uses a perpetual inventory system.
Record the transactions in the books of Pronghorn. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amount
in the relevant debit OR credit box. Entering zero in ALL boxes will result in the question being marked incorrect. Record
journal entries in the order presented in the problem. List all debit entries before credit entries.)
Date
Account Titles and Explanation
=
(To record credit sale)
(To record cost of merchandise sold)
(To record return of goods)
(To record cost of merchandise returned)
Debit
Credit
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