David has received requests from customers for laptop computers and other related items, so he has decided that now is the time to expand his computer service business to include the sale of electronic equipment. David plans to keep Electronic Emporium Pty Ltd as a very small business so that keeping track of inventory levels will not be a problem.The periodic inventory system is the simplest method for recording inventory; however, the perpetual inventory system has the advantage of providing current inventory and cost of sales values at any time that information is required. David has decided to use the perpetual inventory system for his business.David has now registered the business for GST at the rate of 10%.

Transactions for the month include GST where relevant. The cost of inventory sold is 60% of the selling price:

Aug.3Received inventory from Samsung, invoice no. 4235 on terms of n/30. The total value of its invoice was $13,200 including a freight charge of $110.

5Cash sales to the value of $1,584 were made and the money banked.

10Received inventory from Sony, invoice no. 7756 on terms of 2/7, n/30. The total value of its invoice was $5,500.

11Credit sale of $3,300 to Clear Vision Opticians on terms of n/15 (invoice no. 1).

13Clear Vision Opticians returned one of the items sold because the screen was cracked. Electronic Emporium Pty Ltd issues a credit note for $330.

14Sent cheque no. 5 to Sony as payment for the amount owing.

17Made a credit sale to ABC Accountants on terms 5/7, n/30. The total value of this sale was $1,980 (invoice no. 2)

18A repayment of $1,000 was made on the bank loan with cheque no. 6.

21Cash sales for the week totalled $4,950 were banked.

23Received and banked a cheque from ABC Accountants in settlement of their account.

25Received and paid the telephone bill of $165 with cheque no. 7.

31The inventory item returned to Electronic Emporium Pty Ltd by a customer was returned to Samsung as the damage occurred in transit. A credit note was received from Samsung for $220.

Required

a)Use the general journal to prepare any reversing entries, include brief narrations.

b)Record the transactions for August in special journals or the general journal if appropriate.