Question

Exercise 7.4 Recording sales returns and allowances. LO 7-2 The following transactions of Linens and Things that occurred in July. DATE TRANSACTIONS July 5 Accepted a return of damaged merchandise from Terri McDonald, credit customer; issued Credit Memorandum 301 for $486, which includes sales tax of $36; the original sale was made on Sales Slip 1610 of June 30. 21 Gave an allowance to Robert Lynch, a credit customer, for merchandise that was slightly damaged but usable; issued Credit Memorandum 302 for $810, which includes sales tax of $60; the original sale was made on Sales Slip 1663 of July 17. repare journal entries to record the above transactions. View transaction list Journal entry worksheet

Answer 1

Solution :

Journal Entries
Date	Particulars	Debit	Credit
5-Jul	Sales returns and allowances Dr	$450.00
	Sales tax payable Dr	$36.00
	To Accounts receivables - Terri Mcdonald		$486.00
	(To record return of damaged merchandise)
21-Jul	Sales returns and allowances Dr	$750.00
	Sales tax payable Dr	$60.00
	To Accounts receivables - Robert Lynch		$810.00
	(To record allowance given for damaged merchandise)