Question

DS Unlimited has the following transactions during August. August 6 Purchases 82 handheld game devices on account from GameGirl, Inc. , for $260 each, terms 3/10, n/60. August 7 Pays $460 to Sure Shipping for freight charges associated with the August 6 purchase. August 10 Returns to GameGirl seven game devices that were defective. August 14 Pays the full amount due to GameGirl. August 23 Sells 62 game devices purchased on August 6 for $280 each to customers on account. The total cost of the 62 game devices sold is $16,017. 0. Required: Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to 2 decimal places. )

Answer 1

The recording of the transactions during August for DS Unlimited is as follows:

Journal Entries:

August 6 Debit Inventory $21,320

Credit Accounts Payable (GameGirl, Inc.) $21,320

• To record the purchase of 82 handheld game devices on account for $260 each, terms 3/10, n/60.

August 7 Debit Freight-in Expenses $460

Credit Cash $460

• To record the payment for freight on purchased goods of August 6.

August 10 Debit Accounts Payable (GameGirl, Inc.) $1,820

Credit Inventory $1,820

• To record the return of goods (7 devices).

August 14 Debit Accounts Payable (GameGirl, Inc.) $19,500

Credit Cash $18,915

Credit Cash Discounts $585

• To record the full payment, including discounts.

August 23 Debit Accounts Receivable $17,360

Credit Sales Revenue $17,360

• To record the sale of goods on account.

Debit Cost of goods sold $16,017

Credit Inventory $16,017

• To record the cost of goods sold.

Transaction Analysis:

August 6 Inventory $21,320 Accounts Payable (GameGirl, Inc.) $21,320

purchase of 82 handheld game devices on account for $260 each, terms 3/10, n/60.

August 7 Freight-in Expenses $460 Cash $460

August 10 Accounts Payable (GameGirl, Inc.) $1,820 Inventory $1,820

August 14 Accounts Payable (GameGirl, Inc.) $19,500 Cash $18,915 Cash Discounts $585

August 23 Accounts Receivable $17,360 Sales Revenue $17,360

Cost of goods sold $16,017 Inventory $16,017

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