Question

In: Accounting

6. Following are the merchandising transactions for Dollar Store. Nov. 1 Dollar Store purchases merchandise for...

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.

Solutions

Expert Solution

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

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