Part 5 Journalizing purchase and sale transactions, making closing entries, preparing financial statements, and computing the gross profit percentage

Hudson Cleaning has decided that, in addition to providing cleaning services, it will sell cleaning products. Hudson Cleaning uses the perpetual inventory system. During December 2018, Hudson Cleaning completed the following transactions:

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Dec 2. Purchased 600 units of inventory for $3,600 on account from Sparkle, Co. on terms,

3/10, n/20

Purchased 400 units of inventory from Borax on account with terms 4/5, n/30. The total invoice was for $3,200, which included a $200 freight charge.

7. Returned 100 units of inventory to Sparkle from the December 2 purchase (cost $600). 9. Paid Borax 11. Sold 350 units if goods to Happy Maids for $4,900 on account with terms 5/10, n/30.

Hudson Cleanings cost of goods was $2,100

12. Paid Sparkle.

15. Received 30 units with a retail price of $420 of goods back from customer Happy

Maids. The goods cost Hudson Cleaning $180

21. Received payment from Happy Maids, settling the amount due in full.

28. Sold 200 units of goods to Bridget, Inc. for cash of $3,000 (cost $1,144 $1,500).

29. Paid cash for utilities $350

30. paid cash for Sales Commission Expense of $225

31. Record the following adjustment entries:

Physical count of inventory on December 31 showed 350 380 units of goods on hand, $2,541

Depreciation, $170

Accrued salaries expense of $700

Prepared all other adjustments necessary for December (Hint: You will need to review the adjustment information in Chapter 3 to determine the remaining adjustments). Assume the cleaning supplies left at December 31 are $50.