Problem 1

The following transactions took place for Joes TV Shop for the month of April 2018. Joes TV shop uses the perpetual inventory system.

Step 1: Record the following transactions in journal entry format.

1. April 3 - Purchased televisions from Samsung on account at a total cost of $650,000, terms 2/10, n/30. The televisions were shipped FOB shipping point, and the freight cost was $1,000, which was paid in cash.

2. April 5 - Sold televisions costing $250,000 for $390,000 to ABC Company on account.

3. April 7 - ABC Company returned 10 televisions that were damaged. The televisions had cost Joes TV shop $5,000 and were sold for $7,750. Joes TV Shop issued a credit to ABC Company.

4. April 8 - Purchased additional televisions from Samsung on account at a total cost of $30,000, terms 1/10, n/30. The televisions were shipped FOB destination, and the freight cost was $500, which was paid in cash.

5. April 9 - Returned televisions to Samsung because they were damaged (from April 3 purchase). Received a credit of $15,000 from Samsung.