Question

Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Apr. 1 Sold merchandise for $7,000, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $4,200. Apr. 4 The customer in the April 1 sale returned $780 of merchandise for full credit. The merchandise, which had cost $468, is returned to inventory. Apr. 8 Sold merchandise for $3,000, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $2,100. Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.

Answer 1

JOURNAL ENTRIES IN THE BOOKS OF MERCHANDISE COMPANY
DATE	ACCOUNTS	DEBIT(IN $ )	CREDIT ( IN $ )
Apr 01	Account Receivables	7,000
	Sales		7,000
	(Goods sold on credit with term n/30)
Apr 01	Cost of Goods Sold	4,200
	Inventory		4,200
	(Cost of Goods Sold recorded )
Apr04	Sales Return	780
	Accounts Receivables		780
	(Goods Returned by the customer )
Apr04	Inventory	468
	Cost of Goods Sold		468
	(COGS of return goods recorded)
April 08	Account receivables	3,000
	Sales		3,000
	(Goods sold to customer at term 1/10,n/30)
Apr-08	Cost of Goods Sold	2,100
	Inventory		2,100
	(COGS Recorded for sold goods)
April 11	Cash	6,220
	Accounts Receivables		6,220
	(cash received from account receivables )