Question

Griffin Shoe Company records Sales Returns and Allowances, Sales Discounts, and Credit Card Discounts as contra-revenues.

July 12 Sold merchandise to customer at factory store who charged the $300 purchase on her American Express card. American Express charges a 2 percent credit card fee. Cost of goods sold was $175.

July 15 Sold merchandise to Customer T at an invoice price of $5,400; terms 1/10, n/30. Cost of goods sold was $2,700.

July 20 Collected cash due from Customer T.

July 21 Before paying for the order, a customer returned shoes with an invoice price of $1,200; cost of goods sold was $720.

Complete the following table by entering the amounts of the effects of each transaction, including the related cost of goods sold. (Indicate decreases with a minus sign.)

Answer 1

Transaction	July 12	July 15	July 20	July 21	Total
Sales revenue	300	5,400			5,700
Sales returns and allowances				-1,200	-1,200
Sales discount			-54		-54
Credit card fee	-6				-6
Net sales	294	5,400	-54	-1,200	4,440
Cost of goods sold	-175	-2,700		720	-2,155
Gross profit	119	2,700	-54	-480	2,285

Calculations:

Card fees on July 12 = $300 x 2% = $6

Sales discount on July 20= 5,400 x 1% = $54