Question

Note: I will check this homework on Sunday/Monday next week Question (Homework): Jounalize the following merchandising transactions for Abu Dhabi Systems assuming it uses a perpetual inventory system On January 1, Abu Dhabi Systems parehases merchandise for $5,000 on eredit with terms of 3/10, n/30, FOB shipping point; invoice dated January On January 8, Abu Dhabi Systems pays cash for the January 1 purchase. On January 12, Abu Dhabi Systems discovers and returns $1,000 of defective merchandise purchased on January 1 for a cash refiand. On January 15, Abu Dhabi Systems pays $280 eash for transportation costs (freight expenses) with the January 1 purchase On January 18, Abu Dhabi Systems sells merchandise for $3,000 on credit. The cost of the merchandise is $2,000 On January 20, the eustomer retums merehandise from the January 18 transaction. The retumed items are priced at S600 and cost $420; the items were not damaged and were retumed to inventory

Answer 1

	Date	Account Title	Debit	Credit
	January, 1	Merchandise Inventory	$5,000
		Accounts Payable		$5,000
	January,8	Accounts Payable	$5,000
		Inventory		$150	(3% discount=3%*5000)
		Cash		$4,850
	January,12	Accounts Receivable	$1,000
		Inventory		$1,000
	January,15	Inventory	$280
		Cash		$280
	January,18	Accounts Receivable	$3,000
		Sales		$3,000
		Cost of goods sold	$2,000
		Inventory		$2,000
	January,20	Sales Returns	$600
		Accounts Receivable		$600
		Inventory	$420
		Cost of goods sold		$420