Recording Inventory Purchases and Sales on Account Record the entries for the following transactions for Shoppers Inc. Shoppers uses a perpetual inventory system and records sales taxes payable at the point of sale. a. On January 1, 2020, Shoppers Inc. purchased merchandise for resale for $56,000 on credit terms 1/15, n/30. Shoppers Inc. incurred a shipping charge of $288 on the purchase, which was immediately paid. Shoppers Inc. uses the gross method to record purchases. b. Shoppers Inc. sells $22,400 of inventory during the first week of January 2020, to customers for $40,000, with a sales tax rate of 5%. Of the total sales for the week, 30% are cash sales, and 70% are credit sales (n/30). c. On January 14, 2020, Shoppers Inc. pays the balance for purchases on account. d. Assume instead that Shoppers Inc. sells $24,000 of inventory during the first week of January 2020 to customers for $44,800, which includes a 5% sales tax. Of the total sales for the week, 30% are cash sales, and 70% are credit sales. Record the sales entry. Note: Round your answers to the nearest whole dollar. Note: List multiple debits or credits (when applicable) in alphabetical order.
Recording Inventory Purchases and Sales on Account
Record the entries for the following transactions for Shoppers Inc. Shoppers uses a perpetual inventory system and records sales taxes payable at the point of sale.
a. On January 1, 2020, Shoppers Inc. purchased merchandise for resale for $56,000 on credit terms 1/15, n/30. Shoppers Inc. incurred a shipping charge of $288 on the purchase, which was immediately paid. Shoppers Inc. uses the gross method to record purchases.
b. Shoppers Inc. sells $22,400 of inventory during the first week of January 2020, to customers for $40,000, with a sales tax rate of 5%. Of the total sales for the week, 30% are cash sales, and 70% are credit sales (n/30).
c. On January 14, 2020, Shoppers Inc. pays the balance for purchases on account.
d. Assume instead that Shoppers Inc. sells $24,000 of inventory during the first week of January 2020 to customers for $44,800, which includes a 5% sales tax. Of the total sales for the week, 30% are cash sales, and 70% are credit sales. Record the sales entry.
Note: Round your answers to the nearest whole dollar.
Note: List multiple debits or credits (when applicable) in alphabetical order.
| Date | Account Name | Dr. | Cr. | |
|---|---|---|---|---|
| a. | Jan. 1, 2020 | Answer | Answer | Answer |
| Answer | Answer | Answer | ||
| Answer | Answer | Answer | ||
| To record purchase of inventory | ||||
| b. | Jan. 7, 2020 | Answer | Answer | Answer |
| Answer | Answer | Answer | ||
| Answer | Answer | Answer | ||
| Answer | Answer | Answer | ||
| To record sale of merchandise | ||||
| Jan. 7, 2020 | Answer | Answer | Answer | |
| Answer | Answer | Answer | ||
| To record cost of sale of merchandise | ||||
| c. | Jan. 14, 2020 | Answer | Answer | Answer |
| Answer | Answer | Answer | ||
| Answer | Answer | Answer | ||
| To record payment on account | ||||
| d. | Jan. 7, 2020 | Answer | Answer | Answer |
| Answer | Answer | Answer | ||
| Answer | Answer | Answer | ||
| Answer | Answer | Answer | ||
| To record sale of merchandise | ||||
| Jan. 7, 2020 | Answer | Answer | Answer | |
| Answer | Answer | Answer | ||
| To record cost of sale of merchandise |
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