Question

Following are the merchandising transactions of Dollar Store. Nov. 1 Dollar Store purchases merchandise for $1,200 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1. 5 Dollar Store pays cash for the November 1 purchase. 7 Dollar Store discovers and returns $150 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund. 10 Dollar Store pays $60 cash for transportation costs for the November 1 purchase. 13 Dollar Store sells merchandise for $1,296 with terms n/30. The cost of the merchandise is $648. 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $285 and cost $143; the items were not damaged and were returned to inventory. Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method. View transaction list Journal entry worksheet 2 3 4 5 6 7 8 Dollar Store purchases merchandise for $1,200 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1. Note: Enter debits before credits. Date General Journal Debit Credit Nov 01 Record entry Clear entry View general journal

Answer 1

Credit No. Date 1 Nov.1 Debit $1,200 General Journal Merchandise inventory Accounts payable (To record merchandise purchases) & 1,200 2 Nov.s $ 1,200 Accounts payable Merchandise inventory Cash (Po record merchandise Inventory & 24 $ 1176 & 147 3. Nov.7 8147 Cash Merchandise inventory (To record Metwined merchandise $ 60 & 60 4. Novilo Merchandise inventory Cash (To record cash paid) $ 1,296 S.Nov.13 Accounts receivable & 1, 296 Sales To mecand merchandise sold) $ 648 6. Nov.13 $ 648 Cost of goods sold Merchandise inventory (to record cast of goods sold) $285 7. Nov, 16 sales returns and allowance Accounts receivable toxecond sales return and allowance) $ 285

8. Nov. 16 & 143 Merchandise inventory Cast of goods sold (To record cost of goods sold) & 143 calculation: Nov. 5 Merchandise inventory = $ 1,200 X 2). = $ 24 Cash = Accounts payable - Merchandise inventory = $ 1,200 - $24 = $ 1,176 Nov.7 Merchandise inventory - Retwined Merchandise inventary - (Returned Merchandise Inventory x Discount percent) = $ 150 - ( $ 150 X 2 ) = $ 150 - $ 3 = $ 147