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

Question

6. 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 $2,400 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 $100 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund. 10 Dollar Store pays $120 cash for transportation costs for the November 1 purchase. 13 Dollar Store sells merchandise for $2,592 with terms n/30. The cost of the merchandise is $1,296. 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $285 and cost $143 the items were not damaged and were returned to inventory.

Explanation / Answer

Debit Credit 1st Nov Merchandise Inventory $ 2,400.00          Accounts Payable $ 2,400.00 (TO Record Purchase of Merchandise) 5th Nov          Accounts Payable $ 2,400.00 Merchandise Inventory $        48.00 Cash $ 2,352.00 (To Record Payment to Suppplier) 7th Nov Cash $        98.00 Merchandise Inventory $        98.00 (To record of merchandise and received discount) 10th Nov Merchandise Inventory $     120.00 Cash $     120.00 (To record Payment of transporation cost) 13th Nov Accounts Receivable $ 2,592.00 Sales $ 2,592.00 (To record Sale of Merchandise) 13th Nov Cost of Goods Sold $ 1,296.00 Merchandise Inventory $ 1,296.00 (To Record Cost of goods sold). 16th Nov Sales Retuns $     285.00 Accounts Receivable $     285.00 (To Record Sales Return ) 16th Nov Merchandise Inventory $     143.00 Cost of Goods Sold $     143.00 To record Cost of Goods Sold for sales return

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