SKYWALKER'S LIGHTSABERS & SUPPLIES is a merchant of various intergalactic, forceful supplies, specializing in the sale of

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Question:

SKYWALKER'S LIGHTSABERS & SUPPLIES is a merchant of various intergalactic, “forceful” supplies, specializing in the sale of lightsabers. The business is owned by L. Skywalker.
In this summative, you will analyze the company’s transactions over the months of April and May of 2020. You will follow how they purchased inventory from various suppliers and made sales to various clients.

Required:
● Journalize the transactions below under both a PERPETUAL & PERIODIC inventory system in proper form with descriptions.
● Post any transactions that affect inventory under a PERPETUAL inventory system only to the ledger.
● Prepare the Income Statement for the 2-months ended May 31 under both inventory systems.
● Prepare the closing entries under both a PERPETUAL & PERIODIC inventory system.

April Information & Transactions:
1 – Assume that SKYWALKER'S LIGHTSABERS & SUPPLIES had an inventory balance of $122,000 at the start of the month.
2 – Purchased merchandise on account from Vader Company at a cost of $155,000, terms 2/10, n/30, FOB shipping point.
3 – Vader Company shipped the inventory to SKYWALKER. The correct company paid freight charges in cash of $8,000 to Sidious Shipping.
4 – Purchased merchandise on account from Yoda Company at a cost of $160,000, terms 4/15, n/45, FOB destination. Yoda Company shipped the goods immediately and the appropriate company paid freight charges in cash of $4,000 to Lightspeed Shippers.

5 – Returned damaged goods having a gross invoice price of $12,000 to Vader Company. Received a credit for this.

11 – Paid Vader Company the balance owing on their account.

15 - Purchased additional merchandise from Yoda Company at a cost of $26,000, terms n/20, FOB Shipping Point. Yoda Company shipped the goods immediately, and the appropriate company paid freight charges in cash of $500 to Intergalactic Shippers.

17 – Sold 78% of all of the remaining merchandise purchased from Vader Company to Palpatine Incorporated for $160,000 terms 4/10, n/30, FOB shipping point.

18 – Shipped the inventory sold to Palpatine from the 17th. The correct company paid Han Solo Co. $2,500 freight costs in cash.

20 - Returned 12% of the merchandise purchased to Yoda Company.

23 – Issued Palpatine Incorporated a sales allowance of $14,000 because some of the goods did not meet Palpatine’s exact specifications, yet Palpatine kept them anyway.

24 - Sold 45% of the remaining merchandise purchased from Yoda Company to The Empire Shoppe at a price of $160,000, terms 3/10, n30, FOB Destination. The Empire Shoppe paid 1⁄5 of the invoice in cash immediately, and put the remainder on account. The goods were shipped immediately, with the appropriate company paying freight of $15,000 on account to The Force Shipping.

27 – Received the balance owing from Palpatine Incorporated. May Information & Transactions:

1 - The Empire Shoppe returned 6% of merchandise purchased from SKYWALKER'S LIGHTSABERS & SUPPLIES , which were sold on the 24th. The goods were found to be defective and could not be resold. SKYWALKER'S LIGHTSABERS & SUPPLIES issued The Empire Shoppe credit of $11,000 on their account owing.

2 – Purchased merchandise on account from Kenobi's Goods at a cost of $88,000, terms 2/15, n/30, FOB destination. Kenobi shipped the goods immediately, and the correct company paid freight charges of $2,200.

2 - Collected the balance owing on The Empire Shoppe’s account.

3 – Obtained a purchase allowance of $4,000 from Kenobi's Goods to compensate for some minor damage to the goods purchased on May 2.

4 – Sold all of the merchandise previously purchased and on hand from Kenobi's Goods to Rey's Retail for $120,000, terms 2/10, n/30, FOB destination, on a special “May the 4th be with you” promotional deal. The sold inventory was shipped immediately and the correct company paid freight charges of $6,000 to Finn Shipping.

7 – Issued Rey's Retail a credit of $15,000 for returned goods. These goods had cost SKYWALKER half of the retail price and were returned since the lightsabers were not lighting. SKYWALKER would re-design them and re sell them.

14 - Paid the balance owing on Yoda Company’s account.

25 - Sold assorted merchandise to Darth Plagueis at a price of $60,000 cash. The cost of the merchandise sold was 1⁄3 of the retail price.

29 – Received a cheque from Rey's Retail for the balance owing on their account.

30 – Paid Kenobi's Goods the amount owing on the May 2 purchase.

31 – SKYWALKER'S LIGHTSABERS & SUPPLIES took a physical inventory to determine its goods on hand. The physical inventory count determined that $230,000 worth of goods were on hand.