Problem 6-71B (Algorithmic) Recording Sale and Purchase Transactions Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June 2018, Jordan engaged in the following transactions its first month of operations: a. On June 1, Jordan purchased, on credit, 100 pairs of basketball shoes and 210 pairs of running shoes with credit terms of 2/10, n/30. The basketball shoes were purchased at a cost of $75 per pair, and the running shoes were purchased at a cost of $55 per pair. Jordan paid Mole Trucking $250 cash to transport the shoes from the manufacturer to Jordan's warehouse, shipping terms were FOB shipping point, and the items were shipped on June 1 and arrived on June 4. b. On June 2, Jordan purchased 80 pairs of cross-training shoes for cash. The shoes cost Jordan $60 per pair. c. On June 6, Jordan purchased 120 pairs of tennis shoes on credit. Credit terms were 2/10, n/25. The shoes were purchased at a cost of $40 per pair. d. On June 10, Jordan paid for the purchase of the basketball shoes and the running shoes in Transaction a. e. On June 12, Jordan determined that $480 of the tennis shoes were defective. Jordan returned the defective merchandise to the manufacturer. f. On June 18, Jordan sold 50 pairs of basketball shoes at $110 per pair, 100 pairs of running shoes for $85 per pair, 18 pairs of cross-training shoes for $100 per pair, and 35 pairs of tennis shoes for $65 per pair. All sales were for cash. The cost of the merchandise sold was $11,650. g. On June 21, customers returned 10 pairs of the basketball shoes purchased on June 18. The cost of the merchandise returned was $750. h. On June 23, Jordan sold another 20 pairs of basketball shoes, on credit, for $110 per pair and 15 pairs of cross-training shoes for $100 cash per pair. The cost of the merchandise sold was $2,400. i. On June 30, Jordan paid for the June 6 purchase of tennis shoes minus the return on June 12. j. On June 30, Jordan purchased 60 pairs of basketball shoes, on credit, for $75 each. The shoes were shipped FOB destination and arrived at Jordan on July 3. Required: 1. Prepare the journal entries to record the sale and purchase transactions for Jordan during June 2018. If no entry is required, select "No entry required" and leave the amount boxes blank. For a compound transaction, if those boxes in which no entry is required, leave the box blank. a. June 1 Inventory 19,050 Accounts Payable 19,050 (Purchased inventory on account) June 1 Inventory 250 Cash 250 (Paid freight costs) b. June 2 Inventory 4,800 Cash 4,800 (Purchased inventory for cash) c. June 6 Inventory 4,800 Accounts Payable 4,800 (Purchased inventory on account) d. June 10 Accounts Payable 19,050 0 Inventory 0 381 Cash 0 18,669 (Paid accounts payable within discount period) e. June 12 Accounts Payable 480 Inventory 480 (Returned inventory) f. June 18 Cash 18,075 Sales Revenue 18,075 (Recorded cash sales) June 18 Cost of Goods Sold 11,650 Inventory 11,650 (Sold inventory) g. June 21 Sales Returns and Allowances 1.100 Cash 1,100 (Recorded return of sales merchandise) June 21 Inventory 750 Cost of Goods Sold 750 (Recorded cost of inventory returned) June 23 Cost of Goods Sold 2,400 Inventory 2,400 (Recorded cost of merchandise sold) i. June 30 Accounts Payable 4,320 Cash 4,320 (Paid off accounts payable) j. June 30 No entry required 0 No entry required 0 (Purchased inventory on account) 2. Assuming operating expenses of $5,300, prepare Jordan's statement of earnings for June 2018 (Ignore income tax expense.) Jordan Footwear Statement of Earnings For the Period Ended June 30, 2018 Sales 21,775 Less: Sales returns and allowances 1,100 Net sales 20,675 Less: Cost of goods sold 14,000 x 6,675 x Gross margin Less: Operating expenses 5,300 Net income 1,375