Dell and Best Buy: How Does Service and Support Work

Assignment Task

Question

1. Dell and Best Buy are in business with each other. Dell sells their electronic items to Best Buy, who then further sells it to the average consumer and businesses. The following transactions took place between the companies. Both companies use a Perpetual Inventory System.

Important Information for Dell accounts:

A) The Cost of Goods Sold for Dell was $25,000.

B) The Cost of Goods returned by Best Buy was $2,000 and it arrived in mint condition, ready to be resold to other customers again.

Please complete the following:

1. Show your T-account and General Journal Entries for the above transactions in the records of Best Buy. That is imagine you are the accountant for Best Buy in recording the transactions. 

2. Show your T-account and General Journal Entries for the above transactions in the records of Dell. That is imagine you are the accountant for Dell in recording the transactions.

2. 

Please complete the following questions:

A) Calculate Profit and Loss for the month of September 31, 2022 

B) Calculate Owners Equity as of September 31, 2022

C) Show your closing entries in two steps: 

i) Create T-accounts to show how they will be closed

ii) Show your entries in the General Journal format

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