Problem $1$ : P$6-28$A $($FIFO$)$

Background:

Fit Gym began January with merchandise inventory of $78$ crates of vitamins that cost a total of $$4,290.$ Fit Gym uses the perpetual inventory system, accounts for its merchandise using the FIFO inventory costing method, and estimates returns at the end of each month. Fit Gym$\text{'}$s January transactions related to merchandise inventory are included in the Transactions section below.

Assignment:

Journalize each transaction.

Transactions:

$01/05/2018$ Purchased $156$ crates of vitamins for $$64$ each on account. Terms n$/30,$ FOB destination.

$01/13/2018$ Sold $180$ crates of vitamins on account for $$100$ each. Terms $1/10,$ n$/30.$ FOB destination. $($Determine Cost of Goods Sold and record two separate entries$)$

$01/14/2018$ Paid for the vitamins purchased on January $5.$

$01/15/2018$ Paid a $$40$ freight bill related to the January $13$ sale.

$01/18/2018$ Purchased $114$ crates of vitamins on account, $$75$ each. Terms n$/$eom$,$ FOB destination.

$01/20/2018$ Received payment for the sale of vitamins on January $13,$ less the discount.

$01/26/2018$ Sold $150$ crates of vitamins for $$116$ each, on account. Terms $1/10,$ n$/30.$ FOB shipping point. $($Determine Cost of Goods Sold and record two separate entries$)$

$01/31/2018$ Paid for the vitamins purchased on January $18.$

$01/31/2018$ Fit Gym estimates that customers will return a total of $$200$ of vitamins with a cost of $$75$ related to January sales. $($Record two separate entries$)$

Chart of Accounts:

Account # Description Type

$10100$ Cash Current Asset

$10400$ Accounts Receivable Current Asset

$10600$ Merchandise Inventory Current Asset

$10650$ Estimated Returns Inventory Current Asset

$11250$ Equipment Property, Plant, and Equipment

$11300$ Accumulated Depreciation $-$ Equipment Contra$-$Asset

$20100$ Accounts Payable Current Liability

$20150$ Refunds Payable Current Liability

$20250$ Salaries Payable Current Liability

$20500$ Unearned Revenue Current Liability

$30500$ Common Stock Stockholders' Equity

$30700$ Retained Earnings Stockholders' Equity

$40100$ Sales Revenue Sales Revenue

$40250$ Service Revenue Service Revenue

$50100$ Cost of Goods Sold Cost of Goods Sold

$50350$ Salaries Expense Operating Expense

$50500$ Advertising Expense Operating Expense

$50600$ Delivery Expense Operating Expense