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
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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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