Problem 5-5A First Choice Ltd. completed the following merchandising transactions in the month of May 2018. At the beginning of May, First Choice's ledger showed Cash $6,600; Accounts Receivable $1,600; Inventory $3,300; Common Shares $8,600; and Retained Earnings $2,900. First Choice uses a perpetual inventory system. May 1 3 4 8 0 11 14 15 18 Purchased merchandise on account from Depot Wholesale Supply Ltd. for $5,900, terms 1/10, n/30, FOB shipping point. Freight charges of $160 were paid by the appropriate party on the merchandise purchased on May 1. Sold merchandise on account to Ry Company for $3,300, terms 2/10, n/30, FOB destination. The cost of the merchandise was $2,200. Freight charges of $70 were paid by the appropriate party on the May 4 sale. Received a $200 credit from Depot Wholesale Supply when merchandise was returned. Paid Depot Wholesale Supply in full. Purchased supplies for $500 cash. Received payment in full from Ry Company for merchandise sold on account on May 4. Collected $900 of the accounts receivable outstanding at the beginning of the month. All accounts were originally sold on terms of n/30, with no sales discounts. Purchased merchandise from Harlow Distributors Inc. for $1,900, terms n/30, FOB destination. Freight of $60 was paid by the appropriate party on the May 18 purchase of merchandise. Sold merchandise to various customers for $7,100 cash. The cost of the merchandise was $4,000. Paid a $100 cash refund to customers for returned merchandise. The cost of the returned merchandise was $70. It was restored to inventory. A physical inventory count was taken and determined that there was $4,700 of inventory on hand. Prepare any adjustment required. 29 31 Accounts Payable 5841 Inventory 5841 Cash 11 supplies cash T 500 JATUHLIMUI 14 cash 3300 Sales Discounts 40 Accounts Receivable 3440 15 cash Accounts Receivable 900 18 Inventory 900 Accounts Payable 1900 21 No Entry No Entry 22 cash 4000 | Sales 4000 (Sale of goods) 22 Cost of Goods Sold Inventory (Cost of goods sold recorded) 29 Sales Returns and Allowances Cash (Return of merchandise) 29 Inventory Cost of Goods Sold (Return of merchandise, assuming goods are resaleable and returned to inventory) 31 Cost of Goods Sold Problem 5-5A First Choice Ltd. completed the following merchandising transactions in the month of May 2018. At the beginning of May, First Choice's ledger showed Cash $6,600; Accounts Receivable $1,600; Inventory $3,300; Common Shares $8,600; and Retained Earnings $2,900. First Choice uses a perpetual inventory system. May 1 3 4 8 0 11 14 15 18 Purchased merchandise on account from Depot Wholesale Supply Ltd. for $5,900, terms 1/10, n/30, FOB shipping point. Freight charges of $160 were paid by the appropriate party on the merchandise purchased on May 1. Sold merchandise on account to Ry Company for $3,300, terms 2/10, n/30, FOB destination. The cost of the merchandise was $2,200. Freight charges of $70 were paid by the appropriate party on the May 4 sale. Received a $200 credit from Depot Wholesale Supply when merchandise was returned. Paid Depot Wholesale Supply in full. Purchased supplies for $500 cash. Received payment in full from Ry Company for merchandise sold on account on May 4. Collected $900 of the accounts receivable outstanding at the beginning of the month. All accounts were originally sold on terms of n/30, with no sales discounts. Purchased merchandise from Harlow Distributors Inc. for $1,900, terms n/30, FOB destination. Freight of $60 was paid by the appropriate party on the May 18 purchase of merchandise. Sold merchandise to various customers for $7,100 cash. The cost of the merchandise was $4,000. Paid a $100 cash refund to customers for returned merchandise. The cost of the returned merchandise was $70. It was restored to inventory. A physical inventory count was taken and determined that there was $4,700 of inventory on hand. Prepare any adjustment required. 29 31 Accounts Payable 5841 Inventory 5841 Cash 11 supplies cash T 500 JATUHLIMUI 14 cash 3300 Sales Discounts 40 Accounts Receivable 3440 15 cash Accounts Receivable 900 18 Inventory 900 Accounts Payable 1900 21 No Entry No Entry 22 cash 4000 | Sales 4000 (Sale of goods) 22 Cost of Goods Sold Inventory (Cost of goods sold recorded) 29 Sales Returns and Allowances Cash (Return of merchandise) 29 Inventory Cost of Goods Sold (Return of merchandise, assuming goods are resaleable and returned to inventory) 31 Cost of Goods Sold