Equatorial Imports uses a periodic inventory system. Journal entries were prepared for the summarized transactions for 20X1. For simplicity it was assumed that the beginning and ending balances in accounts payable were zero.

Inventories were $71,000 on December 31, 20X0, and $120,000 on December 31, 20X1. Sales were $1,250,000.

Requirement 1.??Prepare three summary journal entries for 20X1 for sales and cost of goods sold. ?(Record debits? first, then credits. Explanations are not? required.)

1. Purchases (all using trade credit), $900,000 2. Purchase returns and allowances $50,000. 3. Freight in, $74,000 paid in cash. 4. Payment for all credit purchases, less returns and allowances and cash discounts on purchases of $18,000