During its first year of operations, tron auto dealership (tad) bought vehicles from a manufacturer on account at a cost of $608,000. tad returned $152,000 of these vehicles to the manufacturer for credit on its account. tad then sold $380,000 of the remaining vehicles at a selling price of $685,000. tad’s customers rarely return vehicles, so tad records sales returns only as they occur. one customer did return a vehicle to tad, which had been sold to the customer for $137,000. the vehicle was in perfect condition, so it was put back into tad’s inventory at tad’s cost of $76,000. prepare journal entries to record these transactions, assuming tad uses a perpetual inventory system. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field.)

The Journal entries are as follows:

(i)

Inventory A/c       Dr. $608,000

To Accounts Payable                   $608,000

(inventory purchased)

(ii)

Accounts Payable A/c     Dr. $152,000

To Inventory                                             $152,000

(inventory returned)

(iii)

Accounts receivables A/c      Dr. $685,000

To Sales revenue                                            $685,000

(sales made on account)

(iv)

Cost of Goods Sold A/c      Dr. $3,80,000

To Inventory                                                 $3,80,000

(inventory adjusted by cost of goods sold)

(v)

Sales return A/c        Dr. $137,000

To Accounts receivables                 $137,000

(returned by customer)

(vi)

Inventory A/c    Dr. $76,000

To cost of goods sold               $76,000

(cost of inventory returned back)

the correct answer for apex is “ doubling a recipe and figuring out how many cups of paint to use are both examples of using math skills”.