Question

Following are the merchandising transactions for Dollar Store Nov. 1 Dollar Store purchases merchandise for $2,800 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 $140 cash for transportation costs for the November 1 purchase 13 Dollar Store sells merchandise for $3,024 with terms n/30. The cost of the merchandise is $1,512. 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $210 and cost $105; 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

Answer 1

Journal entries: 0. Date 1 Nov. 1 General Journal Debit Credit Merchandise invent $2,800 Accounts payable $2,800 2 Nov. 5 Accounts payable $2,800 Merchandise inventory ($2,800 * 2%) Cash $56 $2,744 Cash [$100 * (100%-2%)] Merchandise invent 3 Nov. 7 $98 $98 4 Nov. 10 Merchandise invent $140 Cash $140 5 Nov, 13 Accounts receivable $3,024 Sales $3,024 6 Nov. 13 Cost of goods sold $1,512 Merchandise invent $1,512 7 Nov. 16 Sales returns and allowances $210 Accounts receivable $210 8 Nov. 16 Merchandise invent $105 Cost of goods sold $105