Question

Selected transactions follow for Accustart Sports Ltd. during the company’s first month of business. The company uses a perpetual inventory system.

Feb.	2		Sold $1,151 of merchandise to Andrew Noren on account, terms n/30. The goods had cost Accustart $758.
	4		Andrew Noren returned for credit $139 of the merchandise purchased on February 2. The goods had cost Accustart $85 and they were returned to inventory.
	5		Sold $768 of merchandise to Dong Corporation on account, terms 2/10, n/30. The goods had cost Accustart $495.
	8		Sold $840 of merchandise to Michael Collins for cash. The goods had cost Accustart $621.
	10		Sold $915 of merchandise to Rafik Kurji, who paid with a credit card. The goods had cost Accustart $683.
	14		Dong Corporation paid its account in full.
	17		Andrew Noren purchased an additional $701 of merchandise on account, terms n/30. The goods had cost Accustart $411.
	22		Sold $1,728 of merchandise to Batstone Corporation on account, terms 2/10, n/30. The goods had cost Accustart $1,100.
	28		Andrew Noren paid $1,012 on account.

Prepare the journal entries to record each of the above transactions.

Answer 1

"Credit term of 2/10, n/30" means that payment is be done in 30 days and if made within 10 days then 2% discount will be given.

Date Account Title Credit Debit $1,151 Feb 2 $1,151 Feb 2 $758 $758 Feb 4 $139 $139 Feb 4 $85 $85 Accounts Receivable Sales (To record sales made to Andrew Naron) Cost of Good Sold Merchandise Inventory (To record cost of good sold) Sales Accounts Receivable (To record sales return) Merchandise Inventory Cost of Good Sold (To record cost of goods returned) Accounts Receivable Sales (To record sales made to Doong Corporation) Cost of Good Sold Merchandise Inventory (To record cost of good sold) Cash Sales (To record sales)) Cost of Good Sold Merchandise Inventory (To record cost of good sold) Feb 5 $768 $768 Feb 5 $495 $495 Feb 8 $840 $840 Feb 8 $621 $621

Feb 10 $915 $915 Feb 10 $683 $683 Feb 14 $753 $15 ($ 768 x 29] $768 Feb 17 $701 $701 Cash Sales (To record sales)) Cost of Good Sold Merchandise Inventory (To record cost of good sold) Cash Disocunt on Sales Accounts Receivable (To recod pyament received) Accounts Receivable Sales (To record sales made to Andrew Naron) Cost of Good Sold Merchandise Inventory (To record cost of good sold) Accounts Receivable Sales (To record sales made to Batsstone Corporation) Cost of Good Sold Merchandise Inventory (To record cost of good sold) Cash Accounts Receivable (To record payment received from Andrew Naron) Feb 17 $411 $411 Feb 22 $1,728 $1,728 Feb 22 $1,100 $1,100 Feb 28 $1,012 $1,012