Recording Sale and Purchase Transactions}

Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June 2018 (its first month of operations), Jordan engaged in the following transactions:

a. On June 1, Jordan purchased, on credit, 100 pairs of basketball shoes and 210 pairs of running shoes with credit terms of \(2 / 10, \mathrm{n} / 30\). 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 FOB 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, \(\mathrm{n} / 25\). 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 \(\$ 85\) 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 \(\$ 13,295\).

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 less the return on June 12 .

j. On June 30, Jordan purchased 60 pairs of basketball shoes, on credit, for \(\$ 85\) each. The shoes were shipped FOB destination and arrived at Jordan on July 3.

\section*{Required:}

1. Prepare the journal entries to record the sale and purchase transactions for Jordan during June 2018.

2. Assuming operating expenses of \(\$ 5,300\) and income taxes of \(\$ 365\), prepare Jordan's statement of earnings for June 2018.

\section*{Problem