Following are the merchandising transactions for Dollar Store. Journalize the ab

Question

Following are the merchandising transactions for Dollar Store.

Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method.

Nov. 1 Dollar Store purchases merchandise for $1,500 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 $75 cash for transportation costs for the November 1 purchase. 13 Dollar Store sells merchandise for $1,620 with terms n/30. The cost of the merchandise is $810. 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $300 and cost $150 the items were not damaged and were returned to inventory.

Explanation / Answer

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No Date General Journal Debit Credit 1 Nov. 1 Merchandise Inventory 1,500 Accounts Payable 1,500 2 Nov 5 Accounts Payable 1,500 Merchandise Inventory 30 Cash 1,470 3 Nov. 7 Cash 196 Merchandise Inventory 196 4 Nov. 10 Merchandise Inventory 75 Cash 75 5 Nov. 13 Accounts Receivable 1,620 Sales 1,620 6 Nov 13 Cost of goods sold 810 Merchandise Inventory 810 7 Nov. 16 Sales Returns and allowances $300 Account Receivables $300 8 Nov. 16 Merchandise Inventory 150 Cost of goods sold 150

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