Question

Nov. 20 Sold two items of merchandise to Cheryl Jahn, who paid the $900 sales price in cash. The goods cost Bear’s $550. 25 Sold 20 items of merchandise to Vasko Athletics at a selling price of $5,000 (total); terms 3/10, n/30. The goods cost Bear’s $3,000. 28 Sold 10 identical items of merchandise to Nancy’s Gym at a selling price of $9,000 (total); terms 3/10, n/30. The goods cost Bear’s $4,250. 29 Nancy’s Gym returned one of the items purchased on the 28th. The item was in perfect condition and credit was given to the customer. Dec. 6 Nancy’s Gym paid the account balance in full. (Paid within discount period.) 30 Vasko Athletics paid in full for the invoice of November 25. Required: Prepare journal entries to record the transactions, assuming Bear’s Retail Store records discounts using the gross method in a perpetual inventory system. How do I do this??

Answer 1

Journal Entries:

Date	Particulars	Debit	Credit
Nov 20	Cash	900
	Sales		900
	(To record Cash sales)
	Cost of Goods Sold	550
	Inventory		550
	(To record cost of goods sold)
Nov 25	Accounts Receivable	5,000
	Sales		5,000
	(To record sales on credit)
	Cost of Goods Sold	3,000
	Inventory		3,000
	(To record cost of goods sold)
Nov 28	Accounts Receivable	9,000
	Sales		9,000
	(To record sales on credit)
	Cost of Goods Sold	4,250
	Inventory		4,250
	(To record cost of goods sold)
Nov 29	Sales Returns (9,000/10)	900
	Accounts Receivable		900
	(To record sales returns)
	Inventory (4,250/10)	425
	Cost of Goods Sold		425
	(To record cost of inventory returned)
Dec 6	Cash (8,100-243)	7,857
	Discount allowed (8,100*3%)	243
	Accounts Receivable		8,100
	(To record cash received & discount allowed)
Dec 30	Cash	5,000
	Accounts Receivable		5,000
	(To record cash received)