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Prepare the journal entries for the following transactions for Parties R Us. Parties R Us uses the gross method to record purchases.

January 2 – Purchased 5,000 cases of beads for the upcoming Gasparilla parade at $65 per case. The terms were 3/15, n/45.

January 5 – Paid the freight bill - $550.

January 6 – Returned 500 cases because the beads were purple, green, and gold the colors of Mardi Gras, not Gasparilla.

January 13 – Paid the invoice

February 4 – Sold 3,000 cases at $150 per case. The terms of the sale were 2/10, n/30. You can calculate the amount of cost of goods sold from the January transactions.

February 10 – Received payment for the February 4th sale.

2. Inventory information for Part 311 of Monique Aaron Corp. discloses the following information for the month of June:

June 1 Balance 300 units @ $10 June 10 Sold 200 units @ $24

11 Purchased 800 units @ $12 15 Sold 500 units @ $25

20 Purchased 500 units @ $13 27 Sold 300 units @ $27

Assuming that the perpetual inventory record is kept in dollars and costs are computed at the time of each sale, what is the value of the ending inventory under

(a) LIFO? (b) FIFO? What is gross profit for (c) LIFO (d) FIFO?

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Jarrod Robel
Jarrod RobelLv2
28 Sep 2019

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Prepare General Journal entries to record the followingperpetual system merchandising transactions ofBunbury Company.Use a separate account for each receivable and payable; forexample, record the purchase on January 1 in AccountsPayable-Waterton Company.

Jan. 1 Purchased merchandise from Waterton Company for€18,000 under credit terms of 2/15, n/30, FOB shipping point. Theinvoice showed that Waterton paid €250 for shipping and added thatto the bill. Thus, the total invoice was for €18,250.

5 Sold merchandise to Maryland Corp. for €3,500under credit terms of 1/10, n/45, FOB destination. The merchandisehad a cost €1,700.

9 Purchased merchandise from Walker Corporationfor €8,500 under credit terms of 2/10, n/30, FOB destination.

10 At Walker’srequest, paid €350 of shipping charges on the January 9 purchase,reducing the amount owed to Walker.

11 Paid €210shipping charges related to the January 5 sale to MarylandCorp.

12 Marylandreturned merchandise from the January 5 sale that had cost €300 andbeen sold for €500. The merchandise was restored to inventory.

13 Afternegotiations with Walker Corporation concerning problems with themerchandise purchased on January9, received a credit memorandumfrom Walker granting a price reduction of €700.

14 Receivedbalance due from Maryland Corp. for the January 5 sale.

16 Purchasedoffice equipment from BlueCo, signing a 60-day note payable for€5,300.

17 Paid the amountdue to Walker Corporation for the January9 purchase.

18 Soldmerchandise to RoseCo for €12,500 under credit terms of 2/10, n/60,FOB shipping point. The merchandise had a cost €6,200.

21 RoseCorequested a price reduction on the January 18 sale because some ofthe merchandise was damaged. Sent RoseCo a credit memorandum for€1,250 to resolve the issue.

28 ReceivedRoseCo’s payment of the amount due from the January 18sale.

30 Paid WatertonCompany the amount due from the January 1 purchase.

Feb 3 purchased $3,000 of inventory on account under terms of2/10, n/eom(end of month) and FOB shipping point.


7 returned $500 of detective merchandise purchase on February3.


9 paid freight bill of $90 on February 3 purchase


10 sold inventory on account for 4, 600. Payment terms were 2/15n/30. These goods cost the company $2,500.


12 paid amount owed on credit purchase of February 3, less thereturn and the discount


16 granted a sales allowances of $300 on the Febraury 10sale


23 received cash from February 10 customer in full settlement ofher debt , less the allowance and the discount .


Please help me journalize the February transactions for angelgarden gifts. No explanations are required.

Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows:
Cash $ 21,620 Unearned Revenue (30 units) $ 5,350
Accounts Receivable $ 12,650 Accounts Payable (Jan Rent) $ 3,300
Allowance for Doubtful Accounts $ (1,900) Notes Payable $ 16,000
Inventory (35 units) $ 2,800 Contributed Capital $ 7,000
Retained Earnings – Feb 1, 2012 $ 3,520
• WWC establishes a policy that it will sell inventory at $180 per unit.
• In January, WWC received a $5,350 advance for 30 units, as reflected in Unearned Revenue.
• WWC’s February 1 inventory balance consisted of 35 units at a total cost of $2,800.
• WWC’s note payable accrues interest at a 12% annual rate.
• WWC will use the FIFO inventory method and record COGS on a perpetual basis.
February Transactions
02/01

Included in WWC’s February 1 Accounts Receivable balance is a $1,400 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012.
02/02

WWC paid a $650 insurance premium covering the month of February. The amount paid is recorded directly as an expense.
02/05

An additional 180 units of inventory are purchased on account by WWC for $13,500 – terms 2/15, n30.
02/05

WWC paid Federal Express $360 to have the 180 units of inventory delivered overnight. Delivery occurred on 02/06.
02/10

Sales of 150 units of inventory occurred during the period of 02/07 – 02/10. The sales terms are 2/10, net 30.
02/15

The 30 units that were paid for in advance and recorded in January are delivered to the customer.
02/15

25 units of the inventory that had been sold on 2/10 are returned to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase.
02/16 WWC pays the first 2 weeks wages to the employees. The total paid is $2,800.
02/17

Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rather than as a reduction of inventory costs.
02/18 Wrote off a customer’s account in the amount of $2,000.
02/19

$6,600 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense.
02/19

Collected $10,000 of customers’ Accounts Receivable. Of the $10,000, the discount was taken by customers on $8,000 of account balances; therefore WWC received less than $10,000.
02/26

WWC recovered $600 cash from the customer whose account had previously been written off (see 02/18).
02/27

A $950 utility bill for February arrived. It is due on March 15 and will be paid then.
02/28 WWC declared and paid a $950 cash dividend.
Adjusting Entries:
02/29

Record the $2,800 employee salary that is owed but will be paid March 1.
02/29

WWC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts.
02/29 Record February interest expense accrued on the note payable.
02/29 Record one month’s interest earned Kit Kat’s note (see 02/01).
1-c.

Prepare the Balance Sheet at the end of February. (Balance Sheet only, items to be deducted must be indicated with a negative amount.)

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