Accounting Challenge 4

Unit 2-Challenge 4-Task 1

Task 1: During the year, purchases and sells inventory; however, Sophia is unsure of the proper way to record these transactions. She therefore gives you a list of transactions and asks you to show her how to properly record (journalize) the purchase and sale of inventory under a perpetual inventory system.
During the month of January Year 3, HHEC.Com completed the following merchandising transactions.
January 1 Purchased merchandise on account from RiverhiIll.Com $21,000, terms 2/10, n/30.
January 5 Sold Merchandise on account for $4,200, terms 1/10, n30. The cost of the merchanse sold was $2,600.
January 9 Received credit from for merchandise returned $600.
January 12 Received collections in full, less discounts from customers billed on sales of $4,200 on January 5.
January 20 Paid in less discount
January 22 Purchased merchandise for cash $2,800
January 28 Sold merchandise for cash $6,400. The merchandise sold cost $4,000
January 30 Sold merchandise on account $2,000 n/30. The cost of the merchanise sold was $1,120.