Problem 5-3A

Singh Distributing Company uses the perpetual inventory system and engaged in the following transactions during May of the current year:

Journalizing purchase and sale transactions under the perpetual inventory system

may 3- Purchased office supplies for cash, $22,000

7 may - Purchased inventory on credit terms of 3/10, net eom, $76,000.

8 may -Returned 25 percent of the inventory purchased on May 7. It was not the inventory ordered

10 may -Sold goods for cash, $34,000 (cost, $20,400)

13 may. - Sold inventory on credit terms of 2/15, n/45 for $150,800, less $15,080 quantity discount offered to customers who purchase in large quantities (cost, $90,480)

16 may - Paid the amount owed on account from the purchase of May 7, less the discount and the return

17 may -Received wrong-sized inventory as a sales return from May 13 sale, $12,400, which is the net amount after the quantity discount. Singh's cost of the inventory received was $7,440

18 may -Purchased inventory of $164,000 on account. Payment terms were 2/10 net 30

26 may -Paid supplier for goods purchased on May 18.

28 may -Received cash in full settlement of the account from the customer who purchased inventory on May 13

31may - Prchased inventory for cash, $96,000, less a quantity discount of $9,600, plus freight charges of $2,200

Required 1. Journalize the preceding transactions on the books of Singh Distributing Company 2. Suppose the balance in Inventory was $20,000 on May 1. What is the balance in inventory on May 31?