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In: Accounting

Exercise 7.4 Recording sales made for cash and on account, with 8 percent sales tax, and...

Exercise 7.4 Recording sales made for cash and on account, with 8 percent sales tax, and sales returns.

LO 7-1 Record the following transactions of Fashion Park in a general journal. F

ashion Park must charge 8 percent sales tax on all sales.

DATE TRANSACTIONS 2019

April 2 Sold merchandise for cash, $2,500 plus sales tax.

April 3 The customer purchasing merchandise for cash on April 2 returned $250 of the merchandise; provided a cash refund to the customer.

April 4 Sold merchandise on credit to Jordan Clark; issued Sales Slip 908 for $1,050 plus tax, terms n/30.

April 6 Accepted return of damaged merchandise from Jordan Clark; issued Credit Memorandum 302 for $150 plus tax.

The original sale was made on Sales Slip 908 of April 4.

April 30 Received payment on account from Jordan Clark in payment of her purchase of April 4, less the return on April 6.

1

Journal Entry

Sold merchandise for cash, $2,500 plus sales tax.

2

The customer purchasing merchandise for cash on April 2 returned $250 of the merchandise; provided a cash refund to the customer.

3

Sold merchandise on credit to Jordan Clark; issued Sales Slip 908 for $1,050 plus tax, terms n/30.

4

Accepted return of damaged merchandise from Jordan Clark; issued Credit Memorandum 302 for $150 plus tax. The original sale was made on Sales Slip 908 of April 4.

5

Received payment on account from Jordan Clark in payment of her purchase of April 4, less the return on April 6.

Expert Solution

Date	Account Titles and Explanation	Debit	Credit
Apr. 2	1) Sold merchandise for cash, $2,500 plus sales tax.
	Cash	$ 2,700.00
	Sales Revenue		$ 2,500.00
	Sales Tax Payable (2500 x 8%)		$ 200.00

	2)The customer purchasing merchandise for cash on April 2 returned $250 of the merchandise; provided a cash refund to the customer.
Apr. 3
	Sales return And allowance Account	$ 250.00
	Sales tax payable (250*8%)	$ 20.00
	Cash account		$ 270.00

	3)Sold merchandise on credit to Jordan Clark; issued Sales Slip 908 for $1,050 plus tax, terms n/30.
Apr.4	Accounts receivables -Jordan	1134
	Sales Revenue		1050
	Sales Tax Payable (1050 x 8%)		84

	4) Accepted return of damaged merchandise from Jordan Clark; issued Credit Memorandum 302 for $150 plus tax. The original sale was made on Sales Slip 908 of April 4.
Apr.6	Sales return And allowance Account	$ 150.00
	Sales tax payable (150*8%)	$ 12.00
	Cash account		$ 162.00

Apr. 30	Received payment on account from Jordan Clark in payment of her purchase of April 4, less the return on April 6.
	Cash (1134 - 162)	$ 972.00
	Accounts receivables -Jordan		$ 972.00

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