Question

Listed below are some transactions for Resistant Products Ltd., which uses a perpetual inventory system and reports under ASPE.

May 2		Sold inventory on account to Jameson Inc., terms 2/10, n/30. Selling price $24,000; cost $9,600.
3		Received a portion of the inventory sold on the previous day because it was damaged inventory that could never be sold in the future. Selling price $1,800; cost $720.
5		Received a portion of the inventory sold on May 2 that was in good condition and could be sold to other customers in the future. Selling price $3,000, cost $1,440.
7		Received payment in full from Jameson Inc. for the amount due from the sale made on May 2.

Record the journal entry or entries for each of the transactions above.

Answer 1

Date	Account title	Debit	credit
May 2	Accounts receivable	24000
	Sales revenue		24000
	[To record sales on account]
	Cost of goods sold	9600
	merchandise inventory		9600
May 3	sales return and allowance	1800
	Accounts receivable		1800
	[To record sales return]
	Merchandise inventory	720
	Cost of goods sold		720
	[To reverse the cost of inventory sold ]
May 5	sales return and allowance	3000
	Accounts receivable		3000
	[To record sales return]
	Merchandise inventory	1440
	Cost of goods sold		1440
	[To reverse the cost of inventory sold ]
May 7	cash	18816
	Sales discount (19200*.02)	384
	Accounts receivable		19200

#Amount due for collection ,net of returns = 24000-1800-3000=19200

Since amount is collected within a discount period of 10days from selling date (2/10) so discount of 2% is to be allowed to customer