Printer Supply Company sells computer printers and printer supplies. One of its products is a toner cartridge for laser printers. At the beginning of 2011, there were 225 cartridges on hand at a cost of $62 each. During 2011, Printer Supply purchased 1,475 cartridges at $62 each, sold 830 cartridges at $95 each, and sold an additional 710 cartridges at $102 each after a midyear selling price increase. Printer Supply returned 15 defective cartridges to the supplier. In addition, customers returned 20 cartridges that were purchased at $102 to Printer Supply for various reasons. Assume that Printer Supply uses a periodic inventory system.
Required:
1. Prepare journal entries to record the purchases, sales, and return of inventory. Assume that all purchases and sales are on credit but no discounts were offered.
2. What is the cost of inventory, cost of goods sold, and gross profit for 2011?
3. If you have previously worked Exercise 6-40, compare your answers. What are the differences? Be sure to explain why the differences occurred.