Question 1

(14 marks)

Rocky's Outdoor Adventures (ROC) is a retailer of sporting equipment and outdoor

apparel. The following transactions occurred for ROC during the month of August 2020:

Date

Transaction Description

August 5

P

urchased $7,200 of inventory on account from Champ

Enterprises. The invoice terms were 2/15, n/60

.

August 6

P

aid $156 to ship the goods that were purchased on August 5 from

Champ Enterprises.

August

6

ROC determined that $600 of the goods shipped on

August 5 were

damaged. ROC returned these goods to Champ Enterprises.

August

11

S

old $13,300 of products to Chatterly Collegiate Institute. The

invoice terms were 2/10, n/30.

The merchandise had a cost of

$6,800 to ROC.

August 1

2

Purchased $640 of off

ice supplies from North Co. with cash.

August 1

5

Sent Chatterly Collegiate a credit memo for $400

for goods that did

not meet the customer's specifications.

August 18

Paid the balance owing to Champ Enterprises from the August 5

purchase.

August 21

Rece

ived a cheque from Chatterly Collegiate in full payment of

their account.

August 31

The merchandise inventory account had an ending balance of

$67,400. A physical count of inventory was done and an inventory

balance of $65,775 was reported.

Required

:

Prepare journal entries for each of the above transactions, assuming that ROC has a

perpetual inventory system.