Here are the journal entries for Fitzroy Ltd using the perpetual inventory system. GST does not apply. 1. Purchased 240 units for $220 each on credit. Cost: $240 \text{ units} \times \$220/\text{unit} = \$52,800$ $$ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline & \text{Inventory} & 52,800 & \\ & \quad \text{Accounts Payable} & & 52,800 \\ & \quad \text{(To record purchase of inventory on credit)} & & \\ \hline \end{array} $$ 2. Returned 12 units to the supplier. Cost: $12 \text{ units} \times \$220/\text{unit} = \$2,640$ $$ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline & \text{Accounts Payable} & 2,640 & \\ & \quad \text{Inventory} & & 2,640 \\ & \quad \text{(To record return of inventory to supplier)} & & \\ \hline \end{array} $$ 3. Sold 48 units for $380 each on credit. Sales Revenue: $48 \text{ units} \times \$380/\text{unit} = \$18,240$ Cost of Goods Sold: $48 \text{ units} \times \$220/\text{unit} = \$10,560$ $$ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline & \text{Accounts Receivable} & 18,240 & \\ & \quad \text{Sales Revenue} & & 18,240 \\ & \quad \text{(To record sales on credit)} & & \\ \hline & \text{Cost of Goods Sold} & 10,560 & \\ & \quad \text{Inventory} & & 10,560 \\ & \quad \text{(To record cost of goods sold)} & & \\ \hline \end{array} $$ 4. Purchased office supplies for $360 cash. $$ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline & \text{Office Supplies} & 360 & \\ & \quad \text{Cash} & & 360 \\ & \quad \text{(To record purchase of office supplies for cash)} & & \\ \hline \end{array} $$ 5. Customer returned 6 of the units sold in (3). Sales Return: $6 \text{ units} \times \$380/\text{unit} = \$2,280$ Cost of Goods Returned: $6 \text{ units} \times \$220/\text{unit} = \$1,320$ $$ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline & \text{Sales Returns and Allowances} & 2,280 & \\ & \quad \text{Accounts Receivable} & & 2,280 \\ & \quad \text{(To record customer return)} & & \\ \hline & \text{Inventory} & 1,320 & \\ & \quad \text{Cost of Goods Sold} & & 1,320 \\ & \quad \text{(To record return of inventory to stock)} & & \\ \hline \end{array} $$ 6. Sold 42 units for $390 each on credit. Sales Revenue: $42 \text{ units} \times \$390/\text{unit} = \$16,380$ Cost of Goods Sold: $42 \text{ units} \times \$220/\text{unit} = \$9,240$ $$ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline & \text{Accounts Receivable} & 16,380 & \\ & \quad \text{Sales Revenue} & & 16,380 \\ & \quad \text{(To record sales on credit)} & & \\ \hline & \text{Cost of Goods Sold} & 9,240 & \\ & \quad \text{Inventory} & & 9,240 \\ & \quad \text{(To record cost of goods sold)} & & \\ \hline \end{array} $$ 7. The physical inventory count at the end of the period consisted of 140 units of inventory. Perpetual Inventory Balance Calculation: Initial: 0 units Purchased (1): +240 units Returned to supplier (2): -12 units Sold (3): -48 units Customer returned (5): +6 units Sold (6): -42 units Perpetual Balance = $240 - 12 - 48 + 6 - 42 = 144$ units Inventory Shortage: $144 \text{ units (perpetual)} - 140 \text{ units (physical)} = 4 \text{ units}$ Cost of Shortage: $4 \text{ units} \times \$220/\text{unit} = \$880$ $$ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline & \text{Cost of Goods Sold} & 880 & \\ & \quad \text{Inventory} & & 880 \\ & \quad \text{(To record inventory shortage based on physical count)} & & \\ \hline \end{array} $$