Challenge Reflaction

Task 1: During the year, HHEC.com purchases and sells inventory; however, Sophia is unsure of the proper way to record these transactions. She therefore gives you a list of transactions and asks you to show her how to properly record (journalize) the purchase and sale of inventory under a perpetual inventory system.

During the month of January Year 3, HHEC.Com completed the following merchandising transactions.

January 1 Purchased merchandise on account from RiverhiIll.Com $21,000, terms 2/10, n/30. January 5 Sold Merchandise on account for $4,200, terms 1/10, n30. The cost of the merchanse sold was $2,600. January 9 Received credit from Riverhill.com for merchandise returned $600. January 12 Received collections in full, less discounts from customers billed on sales of $4,200 on January 5. January 20 Paid Riverhill.com in less discount January 22 Purchased merchandise for cash $2,800 January 28 Sold merchandise for cash $6,400. The merchandise sold cost $4,000 January 30 Sold merchandise on account $2,000 n/30. The cost of the merchanise sold was $1,120.

Answer: Account Debit Credit

1-Jan Inventory 21,000 Accounts Payable 21,000

5-Jan Account Receivable 4,200 Sales Revenue 4,200

Cost of Goods Sold 2,600 Inventory 2,600

9-Jan Accounts Payable 600 Inventory 600

12-Jan Cash 4,158 Sales Discounts 42

Accounts Receivable 4200

1

20-Jan Accounts Payable 20,400 Cash 20,400

22-Jan Inventory 2,800 Cash 2,800

28-Jan Cash 6,400 Sales Revenue 6,400

Cost of Good Sold 4,000 Inventory 4,000

30-Jan Accounts Receivable 2,000 Sales Revenue 2,000

Cost of Good Sold 1,120 Inventory 1,120

69,320 69,320

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