Accounting Inventory Mad Libs

1) On the 1st day of ₁₎February, ₂₎Croisant’s shoe store ordered inventory. They purchased 100 pairs
of tennis shoes at $25 each on account, terms 3/15, n/30.

2) On the 3rd of the month, they returned ₃₎6 pairs that were the wrong style for credit.

3) On the ₄₎22nd of the month, they paid for the purchase. (note discount period)

4) The first week, the store sold 12 pairs for $₅₎50 each in cash sales.

5) On the 10th, a sale of 30 pairs of shoes for $50 each was made to the ₆₎Wolf’s basketball teams
on account, terms 2/10, n/30.

6) ₇₎2 pairs of shoes were returned from a previous month sale that had a sales price of $50 per
pair and a cost of $25 per pair.

7) The school paid for the purchase on the ₈₎21st of the month. Record the receipt of cash. (note
discount period)

8) ₉₎Croisant’s purchased an additional 50 pairs of tennis shoes on the 20 th from ₁₀₎Walmart on

account at a cost of $25 per pair with terms 2/10, net 30.

9) On the 22nd, they paid $₁₁₎72 cash for freight in on the latest purchase.

10) The company recorded cash sales for an additional ₁₂₎11 pairs of shoes for $65 each on the 24 th
of the month.

11) On the last day of the month, the company estimated sales returns for their sales. They
estimate that 2% of sales will be returned. (Hint: use total sales from above)

Prepare the appropriate journal entries for each transaction under a perpetual inventory system.

Accounts Debit Credit

1 Inventory 2500
Accounts Payable 2500
2 Accounts Payable 150
Inventory 150
3 Accounts Payable 2350
Cash 2350
4 Cash 600
Sales Revenue 600
Cost of Goods Sold 300
Inventory 300
5 Accounts Receivable 1500
Sales Revenue 1500
Cost of Goods Sold 750
Inventory 750
6 Refunds Payable 100
Cash 100
Inventory 50
Estimated Returns Inventory 50
7 Cash 1500
Accounts Receivable 1500
8 Inventory 1250
Accounts Payable 1250
9 Inventory 72
Cash 72
10 Cash 715
Sales Revenue 715
Cost of Goods Sold 275
Inventory 275
11 Sales Revenue 56.30
Refunds Payable 56.30
Estimated Returns Inventory 26.50
Cost of Goods Sold 26.50