RennerHardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger ofRennershowed Cash of $5,000and Owner's Capital of $5,000.
May 1 Purchased merchandise on account from Braun's Wholesale Supply $4,200, terms 2/10, n/30. 2 Sold merchandise on account $2,100, terms 1/10, n/30. The cost of the merchandise sold was $1,300. 5 Received credit from Braun's Wholesale Supply for merchandise returned $300. 9 Received collections in full, less discounts, from customers billed on sales of $2,100 on May 2. 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $400. 12 Purchased merchandise for cash $1,400. 15 Received refund for poor quality merchandise from supplier on cash purchase $150. 17 Purchased merchandise from Valley Distributors $1,300, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $130. 24 Sold merchandise for cash $3,200. The merchandise sold had a cost of $2,000. 25 Purchased merchandise on account from Lumley, Inc. $620, FOB destination, terms 2/10, n/30. 27 Paid Valley Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30. 31 Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $560. Renner Hardware's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner's Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold. Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit ' May1 ] ' Inventory 4200 | l ' Accounts Payable | l 4200 ' May2 ] ' Accounts Receivable 2100 | l Sales Revenue (To record credit sale) May 5 3 Accounts Payable 300 ' Inventory (To record cost of merchandise sold) May 9 6 Cash Accounts Receivable May 10 9 Accounts Payable | . , May 10 9 Accounts Payable 3900 Inventory 78 Cash 3822 May 11 Supplies 400 Cash 400 l ll May 12 9 Inventory 1400 Cash 1400 May 15 9 Cash Inventory May 17 9 Inventory Accounts Payable May 19 9 Inventory [1 May 19 3 Inventory Cash Cash ' May24 3 Sales Revenue May 25 3 Inventory Accounts Payable (To record cash sale) May 27 3 Accounts Payable Cash (To record cost of merchandise sold) May 29 3 Sales Returns and Allowances Cash (To record cost of merchandise sold) May 29 4 Sales Returns and Allowances Cash May 31 4 (To record merchandise returned) (To record cost of merchandise returned)
