Question

6 Exercise 4-9 Recording purchases, sales, returns, and shipping LO P1, P2 Following are the merchandising transactions of Dollar Store. nts Nov. 1 Dollar Store purchases merchandise for $1,100 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 $100 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund. 10 Dollar Store pays $55 cash for transportation costs for the November 1 purchase. 13 Dollar Store sells merchandise for $1,188 with terms n/30. The cost of the merchandise is $594. 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $290 and cost $145; the items were not damaged and were returned to inventory. eBook Hint Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method. Ask View transaction list eferences Journal entry worksheet 1 2 3 4 5 6 7 8 Dollar Store purchases merchandise for $1,100 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

Solution:

Journal Entries - Dollar Store
Date	Particulars	Debit	Credit
1-Nov	Merchandise inventory Dr	$1,100.00
	To Accounts payable		$1,100.00
	(To record inventory purchase)
5-Nov	Accounts payable Dr	$1,100.00
	To Cash		$1,078.00
	To Merchandise inventory		$22.00
	(To record payment to supplier)
7-Nov	Cash Dr	$98.00
	To Merchandise inventory		$98.00
	(To record merchandise return for cash refund)
10-Nov	Merchandise inventory Dr	$55.00
	To Cash		$55.00
	(To record payment of transportation cost)
13-Nov	Accounts receivables Dr	$1,188.00
	To Sales revenue		$1,188.00
	(To record sales on account)
13-Nov	Cost of goods sold Dr	$594.00
	To Merchandise Inventory		$594.00
	(To record cost of goods sold)
16-Nov	Sales returns and allowances Dr	$290.00
	To Accounts receivables		$290.00
	(To record sales return)
16-Nov	Merchandise inventory Dr	$145.00
	To Cost of goods sold		$145.00
	(Being goods returned taken into inventory)