Following are the merchandising transactions for Dollar Store. Nov. 1 Dollar Sto
ID: 2528661 • Letter: F
Question
Following are the merchandising transactions for Dollar Store.
Nov. 1 Dollar Store purchases merchandise for $1,800 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 $200 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund.
10 Dollar Store pays $90 cash for transportation costs for the November 1 purchase.
13 Dollar Store sells merchandise for $1,944 with terms n/30. The cost of the merchandise is $972.
16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $280 and cost $140? 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.
Explanation / Answer
01-Nov Inventory 1800 Accounts payable 1800 05-Nov Accounts payable 1800 Inventory 36 Cash 1764 07-Nov Cash 196 (200*98%) Inventory 196 10-Nov Inventory 90 Cash 90 13-Nov Accounts receivable 1944 Sales revenue 1944 Cost of goods sold 972 Inventory 972 16-Nov Sales return and allowance 280 Accounts receivable 280 Inventory 140 Cost of goods sold 140