Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $100 per watch. 

Jul. 17 Purchased 50 watches for $7,500 ($150 per watch) on account. 

Jul. 31 Sold 40 watches for $20,000 cash. 

Aug. 12 Purchased 40 watches for $6,400 ($160 per watch) cash. 

Aug. 22 Sold 30 watches for $15,000 on account. 

Sep. 19 Paid for watches purchased on July 17. 

Sep. 27 Receive cash of $9,000 for watches sold on account on August 22. 

Oct. 27 Purchased 80 watches for $13,600 ($170 per watch) cash. 

Nov. 20 Sold 90 watches for $ 45,000 cash. Dec. 4 Purchased 100 watches for $18,000 ($180 per watch) on account. 

Dec. 8 Sold 40 watches for $20,000 on account. 

Required:

Prepare the journal entries for transactions.

Answer rating: 100% (QA)

Here we will assume that the cost of watches were 170 and the quantity was 70 since ... View the full answer