Question

Selected transactions follow for Covington Sports Ltd. during the company’s first month of business. The company expects a return rate of 8% and uses a perpetual inventory system.

Feb.	2		Sold $1,135 of merchandise to Andrew Noren on account, terms n/30. The goods had cost Covington $758.
	4		Andrew Noren returned for credit $141 of the merchandise purchased on February 2. The goods had cost Covington $84 and they were returned to inventory.
	5		Sold $762 of merchandise to Dong Corporation on account, terms n/30. The goods had cost Covington $486.
	8		Sold $839 of merchandise to Michael Collins for cash. The goods had cost Covington $621.
	10		Sold $920 of merchandise to Rafik Kurji account, terms n/30. The goods had cost Covington $677.
	22		Dong Corporation paid its account in full.
	24		Andrew Noren purchased an additional $690 of merchandise on account, terms n/30. The goods had cost Covington $414.
	27		Sold $1,743 of merchandise to Batstone Corporation, terms n/30. The goods had cost Covington $1,100.
	28		Andrew Noren paid $994 on account.

(a)

Prepare the journal entries to record each of the above transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to the nearest whole dollar, e.g. 5,275.)

Answer 1

Feb 2	Accounts Receivable A/C Dr.	$1,135
	To Sales A/C		$1,135

Feb 2	Cost of goods sold A/C Dr.	$758
	To Merchandise A/C		$758

Feb 4	Sales returns A/C Dr.	$141
	To Accounts Receivable A/C		$141

Feb 4	Merchandise A/C Dr.	$84
	To Cost of goods sold A/C		$84

Feb 5	Accounts Receivable A/C Dr.	$762
	To Sales A/C		$762

Feb 5	Cost of goods sold A/C Dr.	$486
	To Merchandise A/C		$486

Feb 8	Cash A/C Dr.	$839
	To Sales A/C		$839

Feb 8	Cost of goods sold A/C Dr.	$621
	To Merchandise A/C		$621

Feb 10	Accounts Receivable A/C Dr.	$920
	To Sales A/C		$920

Feb 10	Cost of goods sold A/C Dr.	$677
	To Merchandise A/C		$677

Feb 22	Cash A/C Dr.	$762
	To Accounts Receivable A/C		$762

Feb 24	Accounts Receivable A/C Dr.	$690
	To Sales A/C		$690

Feb 24	Cost of goods sold A/C Dr.	$414
	To Merchandise A/C		$414

Feb 27	Accounts Receivable A/C Dr.	$1,743
	To Sales A/C		$1,743

Feb 27	Cost of goods sold A/C Dr.	$1,100
	To Merchandise A/C		$1,100

Feb 28	Cash A/C Dr.	$994
	To Accounts Receivable A/C		$994