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

1. Journal Entries -

Date Credit Nov 1 Journal Entries Accounts Title Debit Purchases $ 1,100 Accounts Payable (Being Inventory Purchased on account) $ 1,100 Noy 5 $ 1,100 Accounts Payable Discount on Purchase $ 22 $ 1,078 Cash (Being payment made on account) Nov 7 ash $ 100 Purchases $ (Being Returned some defective inventory) 100 55 Nov 10 Freight In $ Cash (Being Freight Charges Paid) $ 55 Nov 13 Accounts Receivable $ 1,188 Sales Revenue (Being inventory sold on account) $ 1,188 594 Nov 13 Cost of Goods Sold $ Purchases (Being cost of goods incurred) $ 594 290 Nov 16 Sales Return & Allowance $ Accounts Receivable (Being Sales item returned by customer) $ 290 Nov 16 Cost of Goods Sold $ 145 Purchases (Being Cost of Goods Reversed) $ 145

Note -

1. Discount received while making payment on purchase we have consider "Discount on Purchase".

2. Sales return we have consider "Sales return & Allowances".