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Charlie Company uses a perpetual inventory system. During May, the following transactions and events occurred.

May 13 - Sold 8 motors at a cost of $45 each to Scruffy Brothers Supply Company, terms 4/10, n/30. The motors cost Charlie $26 each.

May 16 - One defective motor was returned to Charlie.

May 23 - Received payment in full from Scruffy Brothers.

Journalize the May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 5,275.)

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The May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system are:

Charlie Company Journal entries

May 13

Debit Account receivable $360

(8×$45)

Credit Sales $360

(To record credit sales)

May 13

Debit Cost of goods sold $208

(8×$26)

Credit Merchandise inventory $208

(To record cost of goods sold)

May 16

Debit Sales return and allowances $45

Credit Account receivable $45

(To record goods returned)

May 16

Debit Merchandise inventory $26

Credit Cost of goods sold $26

(To record cost of goods sold returned)

May 23

Debit Cash $302

($315-$13)

Debit Sales discount $13

(4%×$315)

Credit Account receivable $315

($360-$45)

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