Jerome's Fashion Dezigns sells a variety of items of clothing including footwear for men and uses a perpetual inventory system. The business began the last quarter of 2017 with 25 pairs of the "Jordan" brand at a total cost of $152,500. The following transactions, relating to the Jordan brand, took place during the quarter. October 10 Purchased 100 pairs of sneakers on account at a cost of $5,945 per pair. In addition, Jerome paid $405 in cash on each pair of shoes to have the inventory shipped from the vendor's warehouse to Jerome's showroom. October 30 November 1 During the month 90 pairs were sold at a unit selling price of $8,255. | A new batch of 60 pairs was purchased on account at a total cost of $406,500 November 14 5 pairs of the sneakers purchased on November 1 were found to be of the wrong description and returned to the supplier November 30 The sales for November were 60 pairs of sneakers which yielded total sales revenue of $430,000. December 2 Odail Thomas, a customer to whom 10 pairs were sold at the close of business on November 30, returned 4 pairs of the sneakers, as they were of the wrong colour. Under the perpetual inventory system, the transaction on April 10 would be recorded as: 1. Merchandise Inventory Freight-In $594,500 40,500 Accounts Payable $635,000 II. Merchandise Inventory $635,000 Accounts Payable Cash $594,500 40,500 II. Purchases $594,500 Accounts Payable $594,500 Freight-In Cash 40,500 40,500 IV. Purchases $635,000 Accounts Payable $635,000

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 1COP: Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account...

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Transcribed Image Text:Jerome's Fashion Dezigns sells a variety of items of clothing including footwear for men and uses a perpetual inventory system. The business began the last quarter of 2017 with 25 pairs of the "Jordan" brand at a total cost of $152,500. The following transactions, relating to the Jordan brand, took place during the quarter. October 10 Purchased 100 pairs of sneakers on account at a cost of $5,945 per pair. In addition, Jerome paid $405 in cash on each pair of shoes to have the inventory shipped from the vendor's warehouse to Jerome's showroom. October 30 November 1 During the month 90 pairs were sold at a unit selling price of $8,255. A new batch of 60 pairs was purchased on account at a total cost of $406,500 November 14 5 pairs of the sneakers purchased on November 1 were found to be of the wrong description and returned to the supplier November 30 The sales for November were 60 pairs of sneakers which yielded total sales revenue of $430,000. Odail Thomas, a customer to whom 10 pairs were sold at the close of business on November 30, returned 4 pairs of the sneakers, as they were of the wrong colour. December 2 Under the perpetual inventory system, the transaction on April 10 would be recorded as: 1. Merchandise Inventory Freight-In $594,500 40,500 Accounts Payable $635,000 II. Merchandise Inventory Accounts Payable Cash $635,000 $594,500 40,500 II. Purchases $594,500 Accounts Payable $594,500 Freight-In 40,500 Cash 40,500 IV. Purchases $635,000 Accounts Payable $635,000

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