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Recording Sale and Purchase Transactions Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June, Jordan engaged in the following transactions its first month of operations: a. On June1, Jordan purchased, on credit, 100 pairs of basketball shoes and 210 pairs of running shoes with credit terms of 2/10, n/30. The basketball shoes were purchased at a cost of $85 per pair, and the running shoes were purchased at a cost of $60 per pair. Jordan paid Mole Trucking $310 cash to transport the shoes from the manufacturer to Jordan’s warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on June 1 and arrived on June 4. b. On June 2, Jordan purchased 88 pairs of cross-training shoes for cash. The shoes cost Jordan $65 per pair. c. On June 6, Jordan purchased 125 pairs of tennis shoes on credit. Credit terms were 2/10, n/25. The shoes were purchased at a cost of $45 per pair. d. On June 10, Jordan paid for the purchase of the basketball shoes and the running shoes in Transaction a. e. On June 12, Jordan determined that $585 of the tennis shoes were defective. Jordan returned the defective merchandise to the manufacturer. f. On June 18, Jordan sold 50 pairs of basketball shoes at $116 per pair, 92 pairs of running shoes for S85 per pair, 21 pairs of cross-training shoes for $100 per pair, and 48 pairs of tennis shoes for $68 per pair. All sales were for cash. The cost of the merchandise sold was $13,295. No sales returns are expected. g. On June 21, customers returned 10 pairs of the basketball shoes purchased on June 18. The cost of the merchandise returned was $850. h. On June 23, Jordan sold another 20 pairs of basketball shoes, on credit, for $116 per pair and 15 pairs of cross-training shoes for $100 cash per pair. The cost of the merchandise sold was $2,675. i. On June 30, Jordan paid for the June 6 purchase of tennis shoes minus the return on June 12. j. On June 30, Jordan purchased 60 pairs of basketball shoes, on credit, for S85 each. The shoes were shipped F.O.B. destination and arrived at Jordan on July 3. Required: 1. Prepare the journal entries to record the sale and purchase transactions for Jordan during June 2019. 2. Assuming operating expenses of $5,300 and income taxes of $365, prepare Jordan’s income statement for June 2019.

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

Solutions

Chapter
Section
Chapter 6, Problem 66BPSB
Textbook Problem

Recording Sale and Purchase Transactions

Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June, Jordan engaged in the following transactions its first month of operations:

a. On June1, Jordan purchased, on credit, 100 pairs of basketball shoes and 210 pairs of running shoes with credit terms of 2/10, n/30. The basketball shoes were purchased at a cost of $85 per pair, and the running shoes were purchased at a cost of $60 per pair. Jordan paid Mole Trucking $310 cash to transport the shoes from the manufacturer to Jordan’s warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on June 1 and arrived on June 4.

b. On June 2, Jordan purchased 88 pairs of cross-training shoes for cash. The shoes cost Jordan $65 per pair.

c. On June 6, Jordan purchased 125 pairs of tennis shoes on credit. Credit terms were 2/10, n/25. The shoes were purchased at a cost of $45 per pair.

d. On June 10, Jordan paid for the purchase of the basketball shoes and the running shoes in Transaction a.

e. On June 12, Jordan determined that $585 of the tennis shoes were defective. Jordan returned the defective merchandise to the manufacturer.

f. On June 18, Jordan sold 50 pairs of basketball shoes at $116 per pair, 92 pairs of running shoes for S85 per pair, 21 pairs of cross-training shoes for $100 per pair, and 48 pairs of tennis shoes for $68 per pair. All sales were for cash. The cost of the merchandise sold was $13,295. No sales returns are expected.

g. On June 21, customers returned 10 pairs of the basketball shoes purchased on June 18. The cost of the merchandise returned was $850.

h. On June 23, Jordan sold another 20 pairs of basketball shoes, on credit, for $116 per pair and 15 pairs of cross-training shoes for $100 cash per pair. The cost of the merchandise sold was $2,675.

i. On June 30, Jordan paid for the June 6 purchase of tennis shoes minus the return on June 12.

j. On June 30, Jordan purchased 60 pairs of basketball shoes, on credit, for S85 each. The shoes were shipped F.O.B. destination and arrived at Jordan on July 3.

Required:

1. Prepare the journal entries to record the sale and purchase transactions for Jordan during June 2019.

2. Assuming operating expenses of $5,300 and income taxes of $365, prepare Jordan’s income statement for June 2019.

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Chapter 6 Solutions

Cornerstones of Financial Accounting
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