Q4. Annabelle Lighting Co is a retailer of desk lamps for homes and offices. The following transactions occurred November of the current year. The company is on a perpetual inventory system. Record the following transactio the general journal by showing clearly debit (dr ) and credit (cr.) entries:[15 points] i) On November 1 , purchased 50 desk lamps and paid in cash 50 for each desk lamp. ii) On November 20 , sold 10 desk lamps at a price of 80 per desk lamp on account. iii) On November 25 , returned 2 faulty desk lamps to the supplier and was refunded.

To record the transactions in the general journal, we need to make the appropriate debit (Dr) and credit (Cr) entries for each transaction.<br /><br />i) On November 1, purchased 50 desk lamps and paid in cash $50 for each desk lamp.<br /><br />Debit: Inventory (Desk Lamps) $2,500<br />Credit: Cash $2,500<br /><br />Explanation: The company purchased 50 desk lamps at $50 each, so the total cost is $2,500. This amount is recorded as an increase in inventory (debit) and a decrease in cash (credit).<br /><br />ii) On November 20, sold 10 desk lamps at a price of $80 per desk lamp on account.<br /><br />Debit: Accounts Receivable $800<br />Credit: Sales Revenue $800<br /><br />Explanation: The company sold 10 desk lamps at $80 each, so the total revenue is $800. This amount is recorded as an increase in accounts receivable (debit) and an increase in sales revenue (credit).<br /><br />iii) On November 25, returned 2 faulty desk lamps to the supplier and was refunded.<br /><br />Debit: Cash $100<br />Credit: Inventory (Desk Lamps) $100<br /><br />Explanation: The company returned 2 faulty desk lamps, which were originally purchased at $50 each. The refund received is $100. This amount is recorded as an increase in cash (debit) and a decrease in inventory (credit).<br /><br />Note: The perpetual inventory system continuously updates the inventory account with each purchase and sale. In this case, the inventory account is updated with the purchase on November 1, the sale on November 20, and the return on November 25.