Ceres Computer Sales Uses the Perpetual Inventory System and Had

question 89

Essay

Ceres Computer Sales uses the perpetual inventory system and had the following transactions during the month of December:
$\begin{array}{|c|c|l|}\hline \text { Dec } & 1 & \begin{array}{l}\text { Sold merchandise on credit for } \$ 5,000 \text {, terms } 3 / 10, n / 30 \text {. The items sold had a } \\\text { cost of } \$ 3,500 \text {. }\end{array} \\\hline & 3 & \text { Purchased merchandise for cash, } \$ 720 \text {. } \\\hline & 4 & \text { Purchased merchandise on credit for } \$ 2,600 \text {, term } 1 / 20, \mathrm{n} / 30 \text {. } \\\hline & 5 & \begin{array}{l}\text { Issued a credit memorandum for } \$ 300 \text { to a customer who returned me } \\\text { purchased November } 29 \text {. The returned items had a cost of } \$ 210 \text {. }\end{array} \\\hline& 11 & \text { Received payment for merchandise sold December } 1 . \\\hline &15 & \begin{array}{l}\text { Received a credit memorandum for the return of faulty merchandise purchased on } \\\text { December } 4 \text { for } \$ 600 \text {. }\end{array} \\\hline &18 & \begin{array}{l}\text { Paid freight charges of } \$ 200 \text { for merchandise ordered last month. (FOB shipping } \\\text { point). }\end{array} \\\hline &23 & \begin{array}{l}\text { Paid for the merchandise purchased December } 4 \text { less the portion that was } \\\text { returned. }\end{array} \\\hline& 24 & \begin{array}{l}\text { Sold merchandise on credit for } \$ 7,000, \text { terms } 2 / 10, n / 30 . \text { The items had a cost of } \\\$ 4,900 .\end{array} \\\hline &31 & \text { Received payment for merchandise sold on December } 24 .\\ \hline\end{array}$
Required: Prepare the general journal entries to record these transactions.

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Definitions:

Price Elasticity Of Demand

A measure of how much the quantity demanded of a good responds to a change in price.

Price Discrimination

The strategy of selling the same product or service at different prices to different customers, based on their willingness to pay.

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market at a lower cost than could be achieved by multiple firms.

Profit-Maximizing

A strategy or process whereby a firm adjusts its production and pricing to achieve the highest possible profit.