Question 5: Perpetual Inventory: Journal Entries (26 marks)

The following are transactions for Chandler Fashions for the month of June.

June 2 Purchased 3,000 items of inventory under terms 1/10, n/60 and FOB shipping point from Flower Manufacturing. The merchandise had a cost of $12,000

June 7 Returned defective merchandise to Flower Manufacturing with invoice price of $4,000.

June 8 Paid the freight charges on the purchase from Flower Manufacturing in cash for $200.

June 9 Sold merchandise to Trendy Store on account for $10,000 with terms 2/15, n/60 FOB shipping point.

Cost of the merchandise sold was $6,000.

June 10 Paid Flower Manufacturing the balance on account.

June 12 Granted sales allowance of $1,000 to Trendy Store for defective merchandise.

June 23 Collected balance owing from Trendy Store.

June 27 Purchased 500 items of inventory, terms 1/15, n/30, FOB destination from Sparkle Co. The merchandise had a cost $2,000.

June 30 Paid for the merchandise from Sparkle Co.

Instructions

Using a perpetual inventory system, prepare the journal entries to record the transactions

OMIT Explanations.

Date	General Journal	Debit	Credit
June 2	Merchandise Inventory	12000
	Accounts payable- Flower Manufacturing		12000
June 7