Prepare Journal entries to record each of the following sales transactions of a

Question

Prepare Journal entries to record each of the following sales transactions of a merchandising company. Assume a perpetual inventory system.

April 1. Sold merchandise for $5800, granting the customer terms of 5/10, EOM, invoice dated April 1.

The cost of the merchandise is $3480.

April 4. The customer in the April 1 sale returned merchandise and received credit for $660. The merchandise, which had cost $396, is returned to inventory.

April 11. Received payment for the amount of due from the April 1 sale less the return on April 4.

Explanation / Answer

Journal Enties:

Date Accounts Title and Explanation Debit $ Credit $ April 1 Accounts Receivable 5800 Revenue 5800 (terms of 5/10, EOM) Cost of Goods sold 3480 Finished Goods Inventory 3480 April 4 Sales Return 660 Accounts Receivable 660 Finished Goods Inventory 396 Cost of Goods Sold 396 April 11 Cash 4883 Cash discount 257 Accounts Receivable 5140

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