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On October 1, Lance’s Bicycle Store had an inventory of 20 ten speed bicycles at a...

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Accounting

On October 1, Lance’s Bicycle Store had an inventory of 20 tenspeed bicycles at a cost of $350 each. During the month of October,the following transactions occurred.
Purchased 40 bicycles at a cost of $350 each from LamontBicycle Company, terms 1/10, n/30.
6 Sold 20 bicycles to Team Minnesota for $500 each, terms2/10, n/30.
7 Received credit from Lamont Bicycle Company for the returnof 2 defective bicycles.
13 Issued a credit memo to Team Minnesota for the return of adefective bicycle.
14 Paid Lamont Bicycle Company in full, less discount.


yesjournal entries

Answer & Explanation Solved by verified expert
3.8 Ratings (566 Votes)

Lance's Bicycle Store
General Journal
Date Journal Amount (DR) Amount (CR)
04-Oct Inventory(40*$350) $                                                                                                14,000.00
    To Accounts Payable $                                                     5,000.00
(Amount of merchandise inventory purchased on account from Lamont Bicycle term 1/10,n/30)
06-Oct Accounts Receivable(20*$500) $                                                                                                10,000.00
    To Sales Revenue $                                                  10,000.00
(Amount of sales to Team Minnesota term 2/10,n/30)
06-Oct Cost of goods sold(20*$350) $                                                                                                  7,000.00
    To Inventory $                                                     7,000.00
(Amount of cost of goods sold)
07-Oct Accounts Payable(2*$350) $                                                                                                      700.00
    To Inventory $                                                        700.00
(Amount of 2 bicycle returned)
13-Oct Sales return & allowances(1*$500) $                                                                                                      500.00
    To Accounts Receivable $                                                        500.00
(Being amount of sales return)
13-Oct Inventory(1*$350) $                                                                                                      350.00
    To Cost of goods sold $                                                        350.00
(Being amount of cost of goods returned)
14-Oct Accounts Payable($14000-$700) $                                                                                                13,300.00
    To Cash($14000-$700)*99% $                                                  13,167.00
     To Discount $                                                        133.00
(Being amount paid to Lamont Bicycle after 1% discount)

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