Question

Q1. Maia's Bike Shop uses the periodic inventory system and had the following transactions during the month of May:

May 3	Sold merchandise to a customer on credit for $600, terms 2/10, n/30. The cost of the merchandise sold was $350.
May 4	Sold merchandise to a customer for cash of $425. The cost of the merchandise was $250.
May 6	Sold merchandise to a customer on credit for $1,300, term 2/10, n/30. The cost of the merchandise sold was $750.
May 8	The customer from May 3 returned merchandise with a selling price of $100. The cost of merchandise returned was $55.
May 15	The customer from May 6 paid the full amount due, less any appropriate discounts earned.
May 31	The customer from May 3 paid the full amount due, less any appropriate discounts earned.

Instructions:

Prepare the required journal entries that Maia's Bike Shop must make to record these transactions.

Answer 1

	Maia's Bike Shop
	General Journal
Date	Particular	Amount (Dr)	Amount (Cr)
3-May	Accounts Receivable	$               600.00
	To Sales		$                                                600.00
	(Being amount of sales to customer, terms 2/10,n/30)
4-May	Cash	$               425.00
	To Sales		$                                                425.00
	(Being of merchandise inventory sold for cash)
6-May	Accounts Receivable	$           1,300.00
	To sales		$                                            1,300.00
	(Being amount of sales to customer. Terms 2/10,n/30)
8-May	Sales Return	$               100.00
	To Accounts Receivable		$                                                100.00
	(Being amount of sales return)
15-May	Cash($1300*98%)	$           1,274.00		( Discount allowed because payment is within 10 days)
	Sales Discount($1300*2%)	$                 26.00
	To Accounts Receivable		$                                            1,300.00
	(Being amount of cash received after discount)
31-May	Cash($600-$100)	$               500.00		(No discount allowed because payment is not within 10 days)
	To Accounts Receivable		$                                                500.00
	(Being amount of cash received after discount)
	Terms 2/10,n/30 means if customer paid within 10 days 2% discount allowed