P5.

1 (LO 2, 3) Ready-Set-Go distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers.
At the end of June, Ready-Set-Go’s inventory consisted of suitcases costing £1,200. During the month of July, the following
merchandising transactions occurred.

July 1
Dr Inventory 1,620
Cr Accounts Payable(Trunk) 1,620
FOB Destination: seller pays for shipping
 No record for shipping for buyer
July 3
Accounts Receivable Dr 2,200
Sales revenue Cr 2,200
Cost of goods sold Dr 1,400
Inventory Cr 1,400
July 9
Dr Accounts Payable (Trunk) Dr 1,620
Cr Cash Cr 98%x1,620
Cr Inventory 2%x1,620
July 12
Cash Dr 99%x2,200
Dr sales discounts 1%
 Accounts Receivable Cr 2,200
July 17
Cost of goods sold Dr 1,030
Inventory Cr 1,030

Accounts Receivable Dr 1,400

Cr Sales Revenue 1,400

July 18
Inventory Dr 1,900
Accounts Payable (Holiday) Cr 1,900
July 19
Inventory Dr 125
Cash Cr 125
July 20
Inventory Dr 300
Accounts Payable Cr 300
 Total cost of inventory purchases is 2,025
July 20 Received £300 credit (including freight) for suitcases returned to Holiday
Manufacturers.
Dr Account Payable 300
Cr Inventory 300
July 21: Received payment in full from Lady GoGo. Journal entry:
Cash (101) £1,400
July 21
Cash Dr 99%x1,400
Dr Sales discounts 1%x1,400
Accounts receivable (Lady) Cr 1,400
July 22: Sold suitcases on account to Vagabond for £2,400. The cost of goods sold
is £1,350. Journal entry:
Accounts Receivable Dr 2,400
Sales Revenue Cr 2,400
Costs of goods sold Dr 1,350
Inventory Cr 1,350
July 30: Paid Holiday Manufacturers in full. Journal entry: (no discounts)
Accounts Payable (Holiday) Dr 1,600 (1900-300 return)
 Cash Cr 1,600
July 30: Granted Vagabond £200 credit for suitcases returned costing £120.
Journal entry:
Sales Returns and allowances Dr 200
Accounts Receivable Cr 200
Dr Inventory 120
Cr Costs of Goods sold 120

Vree Distributors completed the following merchandising transactions in the month of April. At the beginning of April, the
ledger of Vree showed Cash of €8,000 and Share Capital— Ordinary of €8,000.

Apr 2 Purchased merchandise on accoCunt from Walker Supply €6,200, terms 1/10, n/30.

Inventory Dr 6,200

Accounts Payable Cr 6,200

Apr 4 Sold merchandise on account €5,500, FOB destination, terms 1/10, n/30. The cost of the merchandise sold was €3,400.

Accounts Receivable Dr 5,500

Sales Revenue Cr 5,500

COGS Dr 3,400

Inventory Cr 3,400

Apr 5 Paid €240 freight on April 4 sale.

Delivery expense Dr 240

Cash Cr 240

Apr 6 Received credit from Walker Supply for merchandise returned €500

Accounts Payable Dr 500

Inventory Cr 550

Apr 11 Paid Walker Supply in full, less discount.

Accounts Payable Dr 6,200

Inventory (5,700x1%) Cr 57

Cash (99%x5,700) Cr 5,463

Received collections in full, less discounts, from customers billed on April 4.

Cash Dr 5,500

Discount(1%x5,500) Dr 55

Accounts Receivable Cr 5,500

14 Purchased merchandise for cash €3,800.

Inventory Dr 3,800

Cash Cr 3,800

16 Received refund from supplier for returned goods on cash purchase of April 14, €500.

Sales returns and allowance/Cash Dr 500

Inventory Cr 500

18 Purchased merchandise from Benjamin Glassware €4,500, FOB shipping point,

terms 2/10, n/30.

Inventory Dr 4,500

Cash Cr 4,500

20 Paid freight on April 18 purchase €160.

Freight expense Dr 160

Cash Cr 160

23 Sold merchandise for cash €7,400. The merchandise sold had a cost of €4,120.

Cash Dr 7,400

Sales revenue Cr 7,400

COGS Dr 4,120

Inventory Cr 4,120

Dr Insurance expense
Cr Prepaid Insurance

Dr Property Taxes Payable