Problem 6-66A Recording Sale and Purchase Transactions Alpharack Company sells a line of tennis equipment to retailers. Alpharack uses the perpetual inventory system and engaged in the following transactions during April 2019, its first month of operations: a. On April 2, Alpharack purchased, on credit, 360 Wilbur T-100 tennis rackets with credit terms of 2/10, n/30. The rackets were purchased at a cost of $30 each. Alpharack paid Barker Trucking $195 to transport the tennis rackets from the manufacturer to Alpharack's warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on April 2. b. On April 3, Alpharack purchased, for cash, 115 packs of tennis balls for $10 per pack. C. On April 4, Alpharack purchased tennis clothing, on credit, from Designer Tennis Wear. The cost of the clothing was $8,250. Credit terms were 2/10, n/25. d. On April 10, Alpharack paid for the purchase of the tennis rackets in Transaction a. e. On April 15, Alpharack determined that $325 of the tennis clothing was defective. Alpharack returned the defective merchandise to Designer Tennis Wear. f. On April 20, Alpharack sold 118 tennis rackets at $90 each, 92 packs of tennis balls at $12 per pack, and $5,380 of tennis clothing. All sales were for cash. The cost of the merchandise sold was $7,580. g. On April 23, customers returned $860 of the merchandise purchased on April 20. The cost of the merchandise returned was $450. h. On April 25, Alpharack sold another 55 tennis rackets, on credit, for $90 each and 15 packs of tennis balls at $12 per pack, for cash. The cost of the merchandise sold was $1,800. i. On April 29, Alpharack paid Designer Tennis Wear for the clothing purchased on April 4 minus the return on April 15. j. On April 30, Alpharack purchased 20 tennis bags, on credit, from Bag Designs for $320. The bags were shipped F.O.B. destination and arrived at Alpharack on May 3. Required: 1. Prepare the journal entries to record the sale and purchase transactions for Alpharack during April 2019. If no entry is required, select "No entry required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. 1. Prepare the journal entries to record the sale and purchase transactions for Alpharack during April 2019. If no entry is required, select "No entry required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. a. April 2 Inventory 26,800 Accounts Payable 10,000 x (Purchased inventory on account) April 2 Inventory 195 Cash 195 (Paid freight costs) b. April 3 Inventory 3,392 Cash 196 x (Purchased inventory for cash) C. April 4 Inventory 3,392 Accounts Payable 1,150 x (Purchased inventory on account) d. April 10 Accounts Payable d. April 10 Accounts Payable Inventory Cash (Paid accounts payable within discount period) Accounts Payable Inventory (Recorded return of merchandise) f. April 20 Cash Sales Revenue (Made cash sales) April 20 Cost of Goods Sold Inventory (Recorded cost of merchandise sold) 9. April 23 Sales Revenue Cash (Recorded return of merchandise) April 23 Inventory April 23 Inventory Cost of Goods Sold (Recorded cost of goods sold) h. April 25 Accounts Receivable Cash Sales Revenue (Made sales, both cash and on account) April 25 Cost of Goods Sold Inventory (Recorded cost of merchandise sold) i. April 29 Accounts Payable Cash (Paid off accounts payable) j. April 30 No entry required No entry required (Purchased inventory on account) Feedback 2. Assuming operating expenses of $8,500 and income taxes of $1,180, prepare Alpharack's income statement for April 2019. Alpharack Company Income Statement For the Period Ended April 30, 2019 Sales Less: Cost of goods sold Gross margin Less: Operating expenses 11,500 Income before income taxes Income taxes expense 1,150 Net income Feedback Problem 6-66A Recording Sale and Purchase Transactions Alpharack Company sells a line of tennis equipment to retailers. Alpharack uses the perpetual inventory system and engaged in the following transactions during April 2019, its first month of operations: a. On April 2, Alpharack purchased, on credit, 360 Wilbur T-100 tennis rackets with credit terms of 2/10, n/30. The rackets were purchased at a cost of $30 each. Alpharack paid Barker Trucking $195 to transport the tennis rackets from the manufacturer to Alpharack's warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on April 2. b. On April 3, Alpharack purchased, for cash, 115 packs of tennis balls for $10 per pack. C. On April 4, Alpharack purchased tennis clothing, on credit, from Designer Tennis Wear. The cost of the clothing was $8,250. Credit terms were 2/10, n/25. d. On April 10, Alpharack paid for the purchase of the tennis rackets in Transaction a. e. On April 15, Alpharack determined that $325 of the tennis clothing was defective. Alpharack returned the defective merchandise to Designer Tennis Wear. f. On April 20, Alpharack sold 118 tennis rackets at $90 each, 92 packs of tennis balls at $12 per pack, and $5,380 of tennis clothing. All sales were for cash. The cost of the merchandise sold was $7,580. g. On April 23, customers returned $860 of the merchandise purchased on April 20. The cost of the merchandise returned was $450. h. On April 25, Alpharack sold another 55 tennis rackets, on credit, for $90 each and 15 packs of tennis balls at $12 per pack, for cash. The cost of the merchandise sold was $1,800. i. On April 29, Alpharack paid Designer Tennis Wear for the clothing purchased on April 4 minus the return on April 15. j. On April 30, Alpharack purchased 20 tennis bags, on credit, from Bag Designs for $320. The bags were shipped F.O.B. destination and arrived at Alpharack on May 3. Required: 1. Prepare the journal entries to record the sale and purchase transactions for Alpharack during April 2019. If no entry is required, select "No entry required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. 1. Prepare the journal entries to record the sale and purchase transactions for Alpharack during April 2019. If no entry is required, select "No entry required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. a. April 2 Inventory 26,800 Accounts Payable 10,000 x (Purchased inventory on account) April 2 Inventory 195 Cash 195 (Paid freight costs) b. April 3 Inventory 3,392 Cash 196 x (Purchased inventory for cash) C. April 4 Inventory 3,392 Accounts Payable 1,150 x (Purchased inventory on account) d. April 10 Accounts Payable d. April 10 Accounts Payable Inventory Cash (Paid accounts payable within discount period) Accounts Payable Inventory (Recorded return of merchandise) f. April 20 Cash Sales Revenue (Made cash sales) April 20 Cost of Goods Sold Inventory (Recorded cost of merchandise sold) 9. April 23 Sales Revenue Cash (Recorded return of merchandise) April 23 Inventory April 23 Inventory Cost of Goods Sold (Recorded cost of goods sold) h. April 25 Accounts Receivable Cash Sales Revenue (Made sales, both cash and on account) April 25 Cost of Goods Sold Inventory (Recorded cost of merchandise sold) i. April 29 Accounts Payable Cash (Paid off accounts payable) j. April 30 No entry required No entry required (Purchased inventory on account) Feedback 2. Assuming operating expenses of $8,500 and income taxes of $1,180, prepare Alpharack's income statement for April 2019. Alpharack Company Income Statement For the Period Ended April 30, 2019 Sales Less: Cost of goods sold Gross margin Less: Operating expenses 11,500 Income before income taxes Income taxes expense 1,150 Net income Feedback