Reference no: EM132783935

From July 1 to August 30, 2020, Busy Beaver Ltd. completed the following transactions:

• On July 1, Busy Beaver sold 40 computers at a unit price of $3,000 to Heintoch Corp., terms 1/15, n/30. Average cost for these computers was $1,500. Busy Beaver also paid the freight costs of $3,200 cash.
• On July 5, Heintoch Corp. returned for full credit three damaged computers from the July 1 shipment. These were not returned to inventory. Heintoch agreed to pay the $240 freight cost to return the computers to Busy Beaver.
• On July 10, Busy Beaver received payment from Heintoch for the full amount owed from the July transactions.
• On July 14, Busy Beaver purchased 50 computers on account from Correl Computers Ltd. for $1,500 per unit plus freight for $4,000.
• On July 17, Busy Beaver sold $224,000 in computers and peripherals to Perkins Store, terms 1.5/10, n/30. Cost for these computers was $112,000.
• On July 26, Perkins Store paid Busy Beaver for half of its July purchases.
• On August 30, Perkins Store paid Busy Beaver for the remaining half of its July purchases. Busy Beaver uses the perpetual inventory system.

Required:

Problem 1: Prepare the entries for Busy Beaver Computers Ltd., assuming the gross method is used to record sales and sales discounts.