Printer Supply Company sells computer printers and printer supplies. One of its products is a toner cartridge for laser printers. At the beginning of 2009, there were 200 cartridges on hand at a cost of $60 each. During 2009, Printer Supply Company purchased 1,400 cartridges at $60 each, sold 800 cartridges at $95 each, and sold an additional 750 cartridges at $102 each after a midyear selling price increase. Printer returned 10 defective cartridges to the supplier. In addition, customers returned 15 cartridges that were purchased at $102 to printer for various reasons. Assume that Printer Supply Company uses a periodic inventory system.

Required:

1. Prepare journal entries to record the purchases and sales 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 2009?

3. If you have previously worked Exercise 6-38, compare your answers. What are the differences? Be sure to explain why the differences occurred.