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Journalize the following transactions for Nasheville Art Gift Shop. Assume Nasheville uses the gross method to...

Journalize the following transactions for Nasheville Art Gift Shop. Assume Nasheville uses the gross method to record sales revenue. Explanations are not required. ​(Assume the company uses a perpetual inventory​ system.)

Feb. 3 Purchased $ 3,700 of merchandise inventory on account under terms 5​/10, ​n/EOM and FOB shipping point.

7 Returned $ 900 of defective merchandise purchased on February 3.

9 Paid freight bill of $ 450 on February 3 purchase.

10 Sold merchandise inventory on account for $ 6,000. Payment terms were 2​/15, ​n/30. These goods cost the company $ 3,000.

12 Paid amount owed on credit purchase of February ​3, less the return and the discount.

28 Received payment from the February 10 customer in full settlement of their debt.

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Answer #1
Date Account titles and explanation Debit Credit Calculations
03-Feb Merchandise inventory $3,515 (3700*95%)
    Account payable $3,515 (3700*95%)
07-Feb Account payable $855 (900*95%)
   Merchandise inventory $855 (900*95%)
09-Feb Merchandise inventory $450
    Cash $450
10-Feb Account receivable $6,000
   Sales $6,000
10-Feb Cost of goods sold $3,000
    Inventory $3,000
12-Feb Account payable $2,660 (3515-855)
    Cash $2,660
28-Feb Cash $6,000 (discount not allowed as payment was made after 15 days by customer)
    Account receivable $6,000
Note: The above question has been solved by net price method to record the purchase of inventory
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