Reference no: EM132904682
Question - James Company began the month of October with inventory of $27,000. The following inventory transactions occurred during the month:
-The company purchased merchandise on account for $40,000 on October 12. Terms of the purchase were 1/10, n/30. James uses the net method to record purchases. The merchandise was shipped f.o.b. shipping point and freight charges of $620 were paid in cash.
-On October 31, James paid for the merchandise purchased on October 12.
-During October merchandise costing $19,800 was sold on account for $30,400.
-It was determined that inventory on hand at the end of October cost $47,420.1. Assuming that the James Company uses a perpetual inventory system, prepare journal entries for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Below are the journal entries that need to be prepared using the above information.
a. The company purchased merchandise on account for $40,000 on October 12. Terms of the purchase were 1/10, n/30. James uses the net method to record purchases.
b. The merchandise was shipped f.o.b. shipping point and the freight charges of $620 were paid in cash.
c. On October 31, James paid for the merchandise purchased on October 12.
d. Record the sale of merchandise on account.
e. Record the cost of goods sold.
f. Record any necessary adjusting entry when the inventory on hand at the end of October cost $47,420.