Introduction to Inventories Practice Problems

Complete the practice problems. Check your answers after you finish.

Date		Account Titles and Explanation	Post Ref.	Debit	Credit
2010	1	Accounts Payable		4,000
June	4	Purchase Return and Allowances			4,000
		Received an allowance from Company D for damaged goods.
	2	Accounts Payable		8,000
	3	Purchase Returns and Allowances			8,000
		Returned merchandise to Company D because of improper quality
	3	Accounts Payable ($80,000 - $4,000 - $8,000)		68,000
	0	Purchase Discounts ($68,000 x 0.02)			1,360
		Cash ($68,000 - $1,360)			66,640
		Paid the amount due to Company D.

Date		Account Titles and Explanation	Post. Ref	Debit	Credit
2010	1	Company D
June	0	Accounts Receivable		8000
		Sales			8000
		Sold merchandise to Company C; terms 2/lO/EOM, n/60
	1	Delivery Expense		1200
	1	Cash			1200
		Paid freight on sale of merchandise shipped FOB destinaion, freight prepaid.
	1	Sales Returns and Allowances		4000
	4	Accounts Receivable			4000
		Granted an allowance to Company C for damaged goods.
	2	Sales Returns and Allowances		8,000
	3	Accounts Receivable			8,000
		Merchandise returned from Company C due to improper quality.
	30	Cash ($68,000 - $1,360)		66,640
		Sales Discounts ($68,000 x 0.02)		1,360
		Accounts Receivable ($80,000 - $4,000 - $8,000)			68,000
		Received the amount due from Company C.