Question

2,3 S5-6 Journalizing purchase and sales transactions Suppose Piranha.com sells 3,500 books on account for $17 each (cost of these books is $35,700) on October 10, 2018 to The Textbook Store. One hundred of these books (cost $1,020) were damaged in shipment, so Piranha.com later received the damaged goods from The Textbook Store as sales returns on October 13, 2018. Requirements 1. Journalize The Textbook Store's October 2018 transactions. 2. Journalize Piranha.com's October 2018 transactions. The company estimates sales returns at the end of each month.

Answer 1

S5-6)

1)

Date	Accounts	Debit	Credit
Oct-10	Merchandise Inventory	59,500.00
	Accounts Payable		59,500.00
Oct-13	Accounts Payable	1,700.00
	Merchandise Inventory		1,700.00

2)

Date	Accounts	Debit	Credit
Oct-10	Accounts Receivable	59,500.00
	Sales Revenue		59,500.00
Oct-10	Cost of Goods Sold	35,700.00
	Merchandise inventory		35,700.00
Oct-13	Refunds Payable	1,700.00
	Accounts Receivable		1,700.00
Oct-13	Merchandise inventory	1,020.00
	Estimated Returns Inventory		1,020.00

S5-7)

1)

Date	Accounts	Debit	Credit
Nov-04	Merchandise inventory	12,000.00
	Accounts Payable		12,000.00
Nov-05	Merchandise inventory	30.00
	Cash		30.00
Nov-13	Accounts Payable	12,000.00
	Merchandise Inventory		360.00
	Cash		11,640.00

2)

Date	Accounts	Debit	Credit
Nov-04	Accounts Receivable	11,640.00
	Sales Revenue		11,640.00
Nov-04	Cost of Goods Sold	4,800.00
	Merchandise Inventory		4,800.00
Nov-13	Cash	11,640.00
	Accounts Receivable		11,640.00