Simple Products Inc. was incorporated on April 1, 2016 to operate a merchandizing business. The company uses the perpetual inventory system. All its sales on account are made according to the following terms: 2/10, n30. Its transactions during April 2016 were:
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Apr. |
1 |
Issued share capital for $3,000 cash to Ross Sims, the incorporator and sole shareholder of the corporation |
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1 |
Purchased $4,000 of merchandize on account from Springfield Wholesalers Inc. for terms 2/10, n30 |
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1 |
Sold $3,000 of merchandize on account to Authentic Products Corp. (Cost to Simple: $2,000) |
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2 |
Collected $500 for a cash sale made today to Georges Pierre Ltd. (Cost: $400) |
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2 |
Purchased $750 merchandize on account from White Whale Wholesalers Ltd. for terms n30 |
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2 |
Sold $1,200 of merchandize on account to Champagne Stores Inc. (Cost: $800) |
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5 |
Received half the amount due from Authentic Products Corp. for the April 1 purchase (less discount on payment) |
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8 |
Received the amount due from Champagne Stores Inc. for the April 2 purchase (less discount) |
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9 |
Paid Springfield Wholesalers Inc. for the April 1 purchase (less discount on payment) |
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10 |
Purchased $2,000 of merchandize on account from Ritz Distributors Inc. for terms 2/15, n30 |
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11 |
Sold $500 of merchandize on account to Premier Sales Inc. (Cost: $300) |
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12 |
Premier Sales Inc. returned $100 of merchandize; adjusted the records accordingly. (Cost: $80) |
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15 |
Received a notification from White Whale Wholesalers Ltd. That $150 of defective merchandize included in the April 2 purchase and subsequently returned will not need to be paid. |
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15 |
Purchased $1,500 of merchandize on account from Breakwater Distributors Inc. for terms 2/10, n30 |
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19 |
Purchased $1,250 of merchandize on account from Brown Gull Sales Ltd. for terms n30 |
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20 |
Sold $2,000 of merchandize on account to Salari Corp. (Cost: $1,700) |
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20 |
Received the amount due from Premier Sales Inc. for the April 11 purchase (less return and less discount) |
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22 |
Paid Ritz Distributors Inc. for the April 10 purchase (less discount on payment) |
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24 |
Paid Breakwater Distributors Inc. for the April 15 purchase (less discount on payment) |
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27 |
Sold $800 of merchandize on account to Rook Emporium Corp. (Cost: $500) |
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30 |
Paid Rapide Delivery Inc. $200 for deliveries made to customers during the month |
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30 |
Paid Fast Forwarders Ltd. $500 for transportation to the warehouse during the month. (All purchases are fob shipping point.) |
Assume ending inventory was counted on April 30 and valued at $4,000.
Required: Prepare journal entries, including general ledger account numbers and a brief description for each entry, to record the April transactions and adjust the Merchandize Inventory account at month-end.
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