Question

6. Following are the merchandising transactions for Dollar Store.

Nov.		1		Dollar Store purchases merchandise for $2,400 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.
		5		Dollar Store pays cash for the November 1 purchase.
		7		Dollar Store discovers and returns $100 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund.
		10		Dollar Store pays $120 cash for transportation costs for the November 1 purchase.
		13		Dollar Store sells merchandise for $2,592 with terms n/30. The cost of the merchandise is $1,296.
		16		Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $285 and cost $143; the items were not damaged and were returned to inventory.

Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method.

Answer 1

		Debit	Credit
1st Nov	Merchandise Inventory	$ 2,400.00
	Accounts Payable		$ 2,400.00
	(TO Record Purchase of Merchandise)
5th Nov	Accounts Payable	$ 2,400.00
	Merchandise Inventory		$        48.00
	Cash		$ 2,352.00
	(To Record Payment to Suppplier)
7th Nov	Cash	$        98.00
	Merchandise Inventory		$        98.00
	(To record of merchandise and received discount)
10th Nov	Merchandise Inventory	$     120.00
	Cash		$     120.00
	(To record Payment of transporation cost)
13th Nov	Accounts Receivable	$ 2,592.00
	Sales		$ 2,592.00
	(To record Sale of Merchandise)
13th Nov	Cost of Goods Sold	$ 1,296.00
	Merchandise Inventory		$ 1,296.00
	(To Record Cost of goods sold).
16th Nov	Sales Retuns	$     285.00
	Accounts Receivable		$     285.00
	(To Record Sales Return )
16th Nov	Merchandise Inventory	$     143.00
	Cost of Goods Sold		$     143.00
	To record Cost of Goods Sold for sales return