Question

Nov 4 Purchased $5,700 of merchandise on account from Goodsale Tire. Terms, 1/15, n/45, FOB shipping point. Goodsale Tire prepaid the $75 shipping cost and added the amount to the invoice. 7 Purchased $500 of supplies on account from Office Sale. Terms, 3/10, n/30, FOB destination. 9 Sold $1,400 (cost, $400) of merchandise on account to F. Smith. Terms, 2/15, n/45, FOB destination. 11 Paid $40 freight charges to deliver goods to F. Smith. 13 Returned $1,100 of the merchandise purchased on November 4 and received a credit. 15 Sold $900 (cost, $450) of merchandise to cash customers. 16 Paid for the supplies purchased on November 7. 18 Paid Goodsale Tire the amount due from the November 4 purchase in full. 20 F. Smith returned $600 (cost, $360) of merchandise from the November 9 sale. 22 Purchased $4,300 of inventory. Paid cash. 23 Received payment in full from F. Smith for the November 9 sale. 30 The refund liability for the month of November was estimated to be $300. The cost of goods estimated to be returned was $150.

Answer 1

in the books of Salem Tire Inc.
Journal entries
DATE	GENERAL JOURNAL	DEBIT	CREDIT
04-Nov	Purchase a/c   Dr	$5,775
	To Goodsale Tire. a/c		$5,775
07-Nov	Supplies a/c Dr	$500
	to Office Sale a/c		$500
09-Nov	F.Smith a/c Dr	$1,400
	To sales a/c		$1,400
11-Nov	Freight a/c Dr	$40
	To cash a/c		$40
13-Nov	Goodsale Tire a/c Dr	$1,100
	To Purchase Return a/c		$1,100
15-Nov	cash a/c Dr	$900
	To sales a/c		$900
16-Nov	Office Sale a/c Dr	$500
	To cash a/c		$500
18-Nov	Goodsale Tire a/c Dr	$4600
	To cash a/c		$4600
20-Nov	Sales return a/c Dr	$600
	To F.smith a/c		$600
22-Nov	Purchase a/c   Dr	$4,300
	To cash a/c		$4,300
23-Nov	cash a/c Dr	$800
	To F.smith a/c		$800
30-Nov	Refundable liability a/c Dr	$300
	To Purchase Return a/c		$300
Gross profit = sales - cost of goods sold
=$2,300-$850 = $1,400