Question

Prepare journal entries to record each of the merchandising transactions assuming that the company records purchases using the gross method and a periodic inventory system. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Apr.		1		Sold merchandise for $4,200, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $2,520.
Apr.		4		The customer in the April 1 sale returned $500 of merchandise for full credit. The merchandise, which had cost $300, is returned to inventory.
Apr.		8		Sold merchandise for $1,600, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $1,120.
Apr.		11		Received payment for the amount due from the April 1 sale less the return on April 4.

Answer 1

In the Books of Buyer
Journal Entries
Date	Account Title and explanation	Debit	Credit
April.01	Merchandise	$4,200
	Account Payable		$4,200
April .04	Account Payable	$500
	Merchandise		$500
April .08	Merchandise	$1,600
	Account Payable		$1,600
April .11	Account Payable ($ 4,200 - $ 500)	$3,700
	Cash		$3,700
In the Books of Seller
Journal Entries
Transaction	Account Title and explanation	Debit	Credit
April.01	Account Receivable	$4,200
	Sales Revenue		$4,200
April.01	Cost of Goods Sold	$2,520
	Merchandise		$2,520
April.04	Sales Return and Allowance	$500
	Account Receivable		$500
April.04	Merchandise	$300
	Cost of Goods Sold		$300
April.08	Account Receivable	$16,000
	Sales Revenue		$16,000
April.08	Cost of Goods Sold	$1,120
	Merchandise		$1,120
April.11	Cash	$3,700
	Account Receivable		$3,700