Chapter 8, Problem 8.1E

Perpetual inventory system; journal entries

• LO8–1

John’s Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of

May 2018:

1. John’s purchased merchandise on account for $5,000. Freight charges of $300 were paid in cash.

2. John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $600 and John’s account was credited by the supplier.

3. Merchandise costing $2,800 was sold for $5,200 in cash.

Required:

Prepare the necessary journal entries to record these transactions.